Shares close 2.9 percent higher thanks to Wall Street

MANILA (AFP) - Philippine share prices closed 2.9 percent higher on Thursday tracking gains on Wall Street overnight amid signs that worries about the lending troubles in the US may be easing, dealers said.

The market has now recovered more than two-thirds of the losses it made last week, mirroring the shift in sentiment around the world, they added.

The composite index gained 89.69 points to settle at 3,229.15 off the day's high of 3,254.94.

The broader all-share index 55.12 points to 2,064.52.

There were 127 gainers and 13 losers, while 20 stocks were unchanged.

Volume totalled 2.9 billion shares worth 5.0 billion pesos (108 million dollars).

The peso was 45.34 to the dollar.

"There's a sense of optimism in Asian markets today following last week's turmoil," said DA Market Securities president Nestor Aguila.

"The focus is back on valuation and fundamentals."

Wall Street surged Wednesday as investors saw a pullback in US treasuries and an increase in borrowing by banks as signs that the Federal Reserve's efforts to loosen up the credit market might be working.

Market expectations that the Philippine central bank will keep its key interest rates unchanged at its policy-setting meeting later Thursday also boosted confidence that the economy remains fundamentally sound.

"With money supply growth decelerating and inflationary pressures at relatively benign levels, the central bank is unlikely to move, in our view, following its simplification of the tiered system in the last meeting," Morgan Stanley said in a note.

Among the big winners were recently battered blue chips such as index leader Philippine Long Distance Telephone Co, which rose 30 pesos to 2,545, and Ayala Land, which was up 50 centavos at 14.00 pesos.

Metropolitan Bank Trust Co advanced 2.50 pesos to 53.00.

Food and beverage group San Miguel Corp's A-shares rose one to 62 and its B-shares advanced two to 63.50.