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Jakarta Shares May Move Higher Again 18 days ago
(RTTNews) - The Indonesian stock market inched higher by just a handful of points on Monday, but that was enough to end the four-day losing streak in which it had declined more than 120 points or 5 percent in the process. The Jakarta Composite Index finished just above the 2,370-point plateau, and now investors are anticipating further movement to the upside when the market opens for business on Tuesday.
The global forecast for the Asian markets is modestly positive, thanks to a recovery in the price of commodities. Financials and steel stocks also are expected to provide support. The European and U.S. markets finished firmly in positive territory, and the Asian markets are tipped to follow that lead.
The JCI finished barely higher on Monday after sharp losses at the open, bucking the regional trend of decline on some better than expected inflation data. Gains among the consumer goods producers and financials pushed the market to a positive close.
For the day, the index gathered 3.94 or 0.17 percent to finish at 2,371.64 after trading between 2,294.56 and 2,373.20. Volume was 4.6 billion shares worth 3.8 trillion rupiah.
Among the actives, Unilever Indonesia jumped 5.94 percent and Gudang Garam soared 8 percent, while Telekomunikasi Indonesia lost 1.79 percent, Astra International eased 0.8 percent and Tambang Batubara Bukit Asam shed 2.3 percent.
The lead from Wall Street is fairly optimistic as stocks were able to eke out solid gains on Monday after reaction to a number of economic reports and some Fed comments on the financial sector prompted some volatility. The major averages all finished in positive territory, recovering some of last week's losses.
While the markets saw early strength, stocks gave back some ground after Jon Greenlee, associate director of the Federal Reserve's division of banking supervision and regulation, revealed concerns over the state of the financial system. Greenlee said the U.S. banking system is "far from robust," sparking a pullback in the financial sector.
Separately, the Federal Reserve Governor Daniel Tarullo remarked that even though the economy has begun to show signs of life, the outlook on the magnitude of the recovery should be cautiously optimistic.
The day's initial buying interest came after the Institute for Supply Management released its report on manufacturing activity in the month of October, showing that activity expanded for the third consecutive month amid a jump in production and employment.
The ISM said its index of activity in the manufacturing sector rose to 55.7 in October from 52.6 in September, with a reading above 50 indicating growth in the sector. Economists had been expecting a more modest increase by the index to a reading of 53.0
Additionally, pending home sales rose for a record eighth straight month in September, according to a report released by the National Association of Realtors, with the pending home sales index rising to its highest level since December of 2006. The headline pending home sales index rose 6.1 percent to 110.1 in September from a reading of 103.8 in August. The increase in the index came as a surprise to economists, who had expected the index to edge down 0.1 percent.
Separately, the U.S. Commerce Department revealed that construction spending rose 0.8 percent in September, following a 0.1 percent decline in August and a 1.2 percent slide in July.
In corporate news, troubled lender CIT Group Inc. (CIT) has filed for Chapter 11 bankruptcy protection. The company said on Sunday that its Board of Directors voted to proceed with the prepackaged plan of reorganization for the company and a subsidiary that would restructure its debt and streamline its capital structure.
The major averages moved to the upside going into the close, ending the day above the unchanged line. The Dow closed up 76.71 at 9,789.44, the NASDAQ closed up 4.09 at 2,049.20 and the S&P 500 closed up 6.69 at 1,042.88.
In economic news, Statistics Indonesia said on Monday that the consumer price index rose 2.57 percent on a yearly basis in October, slower than a 2.83 percent rise in the previous month. Economists expected a 2.83 percent increase in prices.
Month-on-month, consumer prices rose 0.19 percent in October, and in the first ten months, consumer prices climbed 2.48 percent from the corresponding period last year.
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