Shares close 2.8 percent higher due to Wall Street recovery, PLDT

MANILA (AFP) - Philippine share prices closed 2.8 percent higher on Tuesday as Wall Street recovered and Philippine Long Distance Telephone reported better than expected results, dealers said.

The composite index added 91.35 points to 3,348.34, off the day's high of 3,361.64. The index had lost 2.8 percent on the previous session.

The broader all-share index rose 56.63 points to 2,143.02.

Out of 167 stocks traded, 126 advanced, 12 declined, while 29 ended flat.

A total of 3.9 billion shares worth 4.8 billion pesos (105.87 million dollars) changed hands.

"It was basically a technical rebound, the market has experienced big drops in previous sessions and this opened up bargains," said Lawrence de Leon of Accord Capital Equities.

Analysts said investors ignored data showing Philippine inflation accelerated to 2.6 percent in July from 2.3 percent in the previous month, the fastest pace in five months.

The central bank was only expecting consumer prices to rise by up to 2.5 percent last month but governor Amando Tetangco said the latest data showed that the inflation environment remains manageable.

De Leon said the July inflation figure could still be considered benign.

"The number is still within the central bank's full-year forecast. We should only start worrying if the spike in prices will be bigger in the months head, especially if agricultural output drops given the drought situation," he said.

Despite the market's strong rebound, "today's rally doesn't mean the market is totally out of the woods," said Jose Vistan of AB Capital Securities.

"Investors will still be cautious as they are still trying to understand the US sub-prime woes, how bad it will go and how it will trickle to the rest of the world," Vistan added.

Investors are keen to know if the Federal Reserve will comment on the meltdown in the sub-prime mortgage market when it issues a statement at the end of its policy meeting Tuesday. The Fed is expected to keep its key interest rate at 5.25 percent.

Philippine Long Distance, was among the day's top performers, gaining 60 pesos to 2,670 after reporting that its first half consolidated net profit grew 11 percent to 17.002 billion pesos.

SM Investments added 22.50 pesos to 372.50, Ayala Land edged up one to 15.25, and Megaworld was up 15 centavos to 3.35 pesos.

San Miguel A was unchanged at 66 pesos while its B shares added 50 centavos to 67.50 pesos.