Philippines jumps as slowing inflation supports views of steady rates

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(Feb 6): Philippine shares jumped 1.7 percent on Wednesday to their highest level in more than 10-1/2 months, as slower January inflation supported views that the central bank would keep interest rates steady for a second straight meeting on Thursday.

Data released on Tuesday showed Philippine inflation eased to its slowest annual pace in 10 months in January on lower food, transport and utility costs.

The consumer price index rose 4.4 percent from a year earlier, slightly below the 4.5 percent median forecast in a Reuters poll.

It was also the third straight month that inflation has slowed.

Cooling inflation gives the central bank "more space" to review its monetary policy, Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo said, after a rigorous tightening cycle in the previous year with five straight hikes of a total of 175 basis points.

Industrials and financials pushed the benchmark stock index to its highest since March 19, with SM Investments Corp and SM Prime Holdings Inc strengthening 2.1 percent and 2.6 percent, respectively.

The Philippine market was closed on Tuesday for the Lunar New Year holiday.

Among other Southeast Asian stock markets, Indonesia climbed 0.8 percent, recouping from the previous session's sharp fall, ahead of the release of fourth-quarter GDP data later in the day.

Indonesia's economic growth rate likely slowed slightly in the final quarter of 2018, but the full-year pace was probably the best in five years, a Reuters poll showed.

The poll predicted an expansion of 5.11 percent in October-December, fractionally less than the third quarter's 5.17 percent annual rate.

Telecom and material stocks were the biggest boosts with Telekomunikasi Indonesia (Persero) Tbk Perusahaan Perseroan PT firming 1.6 percent and Unilever Indonesia Tbk PT strengthening 1.9 percent.

Malaysia, Vietnam and Singapore markets were closed for the Lunar New Year.  - Reuters