Market climbs above 8,000 points

The stock market climbed Wednesday to send the benchmark index back above 8,000 points ahead of month-end window dressing activities.

The Philippine Stock Exchange Index rose 28.87 points, or 0.4 percent, to 8,020.06 on a value turnover of nearly P6 billion. Gainers beat losers, 90 to 80, with 54 issues unchanged.

BDO Unibank Inc., the biggest lender in terms of assets, gained 2.4 percent to P155.70, while Metropolitan Bank & Trust Co., the second-largest bank, added 2.2 percent to P67.45.

Global Ferronickel Holdings Inc. advanced 8 percent to P1.88, but Alliance Global Group Inc. of tycoon Andrew Tan fell 3 percent to P11.60.

The rest of Asian markets slipped Wednesday as traders play a wait-and-see game ahead of the Federal Reserve’s latest policy decision, with expectations of another interest rate cut but focus also on its plans for the future.

Expectations for another drop in borrowing costs, along with optimism over the China-US trade talks and healthy corporate reports have provided much-needed support to equities of late after a volatile year.

However, while the general consensus is for a third reduction this year, there is a concern that the upbeat earnings, progress on trade and signs of resilience in the US economy could keep the central bank from further measures.

This makes Fed boss Jerome Powell’s post-meeting statement crucial, with dealers poring over his every word.

“I don’t think we should fear a hawkish cut,” said Carol Schleif, at Abbot Downing Investment Advisors, told Bloomberg TV.

“I do think one of the things to keep in mind, relative to the prior cut periods, is the Fed starting from a much lower rate so there is a lot less room for the Fed to continue to cut.”  

Most markets were down, with investors having already factored in a cut.

Hong Kong fell 0.4 percent in the afternoon while Shanghai ended down 0.5 percent and Tokyo gave up 0.6 percent.

Sydney dropped 0.8 percent and Seoul shed 0.6 percent.

There were gains, however, in Singapore, Mumbai, Taipei, Bangkok and Jakarta.

Sterling was flat but supported by relief that Britain is unlikely to leave the European Union without a deal after the bloc’s leaders granted a three-month extension to the deadline and MPs voted for a general election in December.

Boris Johnson finally got his snap poll after the opposition Labour Party said it was satisfied a no-deal divorce was now off the table.

The prime minister is optimistic his Conservatives will get a clear majority in the vote—tipped to be December 12—that will allow him to push his Brexit agreement through parliament and drag the country out of the EU after years of deadlock.

A Conservative “majority is arguably the most sterling-positive outcome, initially at least, in so far as it means the government withdrawal bill can then be passed and the UK ‘Brexits’ no later than January 31, with a transition deal lasting through end-2020,” said National Australia Bank analyst Ray Attrill.

But he added “there will remain a high degree of uncertainty over what a post-Brexit UK-EU trading relationship will look like come 2021.” With AFP