THE MAIN INDEX quickly abandoned the 8,000 level at the end of this week’s trading as investors shy away from making bets ahead of the holidays and following the rate cut by the US Federal Reserve.

The Philippine Stock Exchange index (PSEi) gave up 42.94 points or 0.53% to retreat at 7,977.12 on Thursday. The broader all-shares index also lost 13.66 points or 0.28% to 4,787.45.

“Investors kept to cash for the long weekend and immediately after the Federal Reserve’s third rate cut of the year and comments from Chairman Jerome Powell that signaled it would be a while before the central bank hikes rates,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.

The Federal Reserve on Wednesday cut interest rates for the third time this year to help sustain US growth despite a slowdown in other parts of the world, but signaled there would be no further reductions unless the economy takes a turn for the worse.

“We believe that monetary policy is in a good place,” Fed Chair Jerome Powell said in a news conference after the US central bank announced its decision to cut its key overnight lending rate by a quarter of a percentage point to a target range of between 1.50% and 1.75%.

“We took this step to help keep the economy strong in the face of global developments and to provide some insurance against ongoing risks,” he said. “We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook.”

Wall Street rose on Wednesday, as the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite all rose 0.43%, 0.33% and 0.33%, respectively.

Meanwhile, most Southeast Asian stock markets rose on Thursday, with Singapore leading gains, after the US central bank delivered an expected quarter-point rate cut to support economic growth.

However, due to mounting geopolitical and trade tensions, the futures markets are already pricing in 25-50-basis-point cuts by mid 2020, and the Fed’s move is seen as “not quite so much a ‘hawkish cut’ as it may be a ‘dovish pause,’” Mizuho analysts said in a note.

Back home, almost all sectoral indices ended in red territory. Financials gave up 22.55 points or 1.16% to 1,918.40; property lost 34.93 points or 0.83% to 4,172.29; mining and oil shed 26.82 points or 0.29% to 9,216.52; services declined 2.92 points or 0.19% to 1,513.05; and industrials fell 2.79 points or 0.02% to 10,470.94.

The lone increasing index was holding firms, which added 1.32 points or 0.01% to 7,830.30.

Value turnover grew to P7.76 billion from P5.99 billion on Wednesday, with 1.10 billion issues changing hands. More shares declined than advanced, 100 against 78, while 61 names were flat.

Net foreign buying totaled P211.35 million on Thursday, thinning from the P619.53 million the previous day. — D.A. Valdez with Reuters

RELATED ARTICLESMORE FROM AUTHOR