Fitch forecast keeps up positive sentiment

Another positive US inflation report and an assurance from credit watchdog unit Fitch Solutions that Philippine growth is still intact inspired the market rally to continue and led the index to close the weekend at 18.98 points higher.

The Philippine Stock Exchange index ended at 6,699.66 on turnover of P6.71 billion.

Despite the slower 7.4 percent growth in the second quarter, Fitch Solutions Country Risk & Industry Research raised its growth forecast to 6.6 percent by year’s end.

The think tank believes the growth target of 6.5 percent to 7.5 percent is attainable.

Fitch’s forecast reflects expectations that the rest of the year’s expansion will be moderate relative to the first half.

The deceleration in growth was in line with Fitch’s view, but the magnitude was less than expected. Fitch expects weakening global demand, elevated energy prices, and tightening monetary conditions to continue to weigh on the economy.

The June Producer Price Index report showed a drop of 0.5 percent from the previous month compared with an estimate of a 0.2 percent gain, based on a Dow Jones survey.

On the economic front, import prices and consumer sentiment data are due out Friday.

Oil advanced on Thursday after the International Energy Agency raised its oil demand growth forecast for this year as soaring gas prices drive some consumers to switch to oil.

Rest of Asia down

Asian stocks tracked Wall Street losses and the yen fell as investors remained filled with uncertainty over how aggressively the Federal Reserve would raise interest rates to tackle inflation despite softer numbers earlier this week.

Morgan Stanley Capital International’s broadest index of Asia-Pacific shares outside Japan fell 0.10 percent, and Australia’s AXJO was down 0.62 percent.

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