May 5--At the Philippine Dealing System, the local currency appreciated following a surge in regional currencies and the weakening dollar, a trader said.

The peso closed at 48.120 to against the greenback from last Thursday's 48.350 finish. There was no trading on Friday, which marked Labor Day.

Trading volume eased to $682.775 million from $962.750 million on Thursday.

Boyet Ayes, Rizal Commercial Banking Corp. vice president, said the peso joined other Asian currencies that rose against the dollar.

"The dollar weakened because of the increasing reduction of risk aversion," he said, adding this may have been brought about by the positive outlook on the economic stimulus packages in the United States.

He, however, said the market may experience a correction in the short term as it awaits the US government's findings on bank stress tests this week. But it would still be a "slight biased towards the stronger peso," he said.

"We're nearing the top side of the market. The peso may reach 48.30 to 48.70 in the coming weeks," he added.

A report from Metropolitan Bank and Trust Co. likewise said the improved global economic sentiment would help the peso keep its momentum.

"However, [the] market is expected to tread cautiously ahead of the release of the US government's findings on bank stress tests," Metrobank said.

At the Philippine Stock Exchange, share prices closed 1.6-percent higher Monday as investors bought into blue chip stocks, dealers said.

The composite index rose 34.12 points to close at 2,137.62 while the all-shares index put on 1.1 percent at 1,374.91.

A total of 2.29 billion shares changed hands worth P2.24 billion ($46.5 million).

Advancers led losers, 63 to 30 while 42 issues closed unchanged.

"We're seeing improved investor sentiment. The contributing factors include improving earnings and slowing inflation," Chelsea Dipasupil at RCBC Securities told Dow Jones.

Gainers were led by Ayala Corp., which added 5.4 percent at P233 and geothermal producer Energy Development Corp., which rose 4.2 percent to P3.75.

Metrobank added 6.7 percent to P32. -- With AFP

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