Philippine share prices on Wednesday climbed back above the psychological 4,300 support level on growing optimism that European leaders will bolster efforts to stem the region’s debt crisis.
At the Philippine Stock Exchange, the composite index advanced by 32.40 points, or 0.76 percent to 4,315.17, while the broader all-shares inched up 5.03 points, or 0.17 percent to 2,991.24.

Gainers led losers, 87 to 72, while 50 stocks were unchanged. A total of 2.16 billion stocks worth P4.97 billion changed hands.

Most counters finished in the green except for the holding firms, which declined by 0.01 percent.

“Driven by hopes of a resolution of the European debt crisis, investors positioned on big cap blue chip issues like Philippine Long Distance Telephone Co. and SM Prime Holdings Inc.,” said AB Capital Securities Inc.

PLDT, which rose 2.73 percent to P2,480 each, was responsible for more than half of the index’s gain on Wednesday, the brokerage added.

“The EU summit is being viewed as the final chance to resolve the Eurozone debt crisis. The EU may come up with another rescue package, which is bigger and could provide some short term optimism,” said AB Capital.

“If the EU comes up with a plan of action that will result to a stronger fiscal union, we could see the markets run up substantially,” the brokerage added.

Overnight, the Dow Jones industrial average rose by 52.30 points, or 0.43 percent to 12,150.13 on hopes that a warning of credit rating downgrades will prompt European leaders to draft an aggressive framework to resolve the euro zone debt crisis at a crucial summit later this week.
On Monday, Standard & Poor’s placed 15 eurozone member nations on negative watch list.

Even after this week’s summit, Europe may remain at the core of markets’ concern for the rest of the year and even through the first quarter of next year, said Jun Calaycay of Accord Capital Equities Corp.

At the Philippine Dealing System, the peso strengthened to 43.280 to the US dollar from 43.460 the previous trading day.

The pairing opened high at 43.380 and tested a low of 43.250. Total trading volume eased to $990.810 million from $994.720 million the previous trading day.

Pauline Revillas, Metrobank research analyst, said emerging market currencies will remain under pressure until risk aversion eases as investors wait for solid and firm solution to the eurozone crisis.
“With only a few days left until the end of the year, the dark cloud of uncertainty that currently hovers over the global financial markets is seen to stay in its place until the early part of 2012. All eyes are now on the European region, as prospects for the coming year rest on the immediate prevention of a break-up in the single currency. Outlook for emerging market currencies, including the Philippine peso, is still for short- to medium-term weakness but long-term strength given their stronger growth prospects, sounder financial systems, and lower levels of indebtedness,” Revillas said in a commentary.

Separately, Security Bank said markets remained wary of the results of the European Union summit later this week.

The “market will watch for jobs data out of the US,” Security Bank also said.
The dollar-peso exchange rate is expected to trade at the 43.20 to 43.45 range today.

With report from Lailany P. Gomez