Market Commentary and Intraday News
Jakarta Stocks May See Mild Consolidation
264 days ago
(RTTNews) - The Indonesia stock market has moved higher now in back-to-back sessions, climbing more than 90 points or 2.2 percent along the way. The Jakarta Composite Index closed just below the 4,120-point plateau, and now analysts are forecasting a round of profit taking at the opening of trade on Tuesday.
The global forecast for the Asian markets is mixed with a hint of weakness after ratings agency Moody's downgraded the outlook for the European Union to negative from stable. A decline in Germany's manufacturing activity also may weigh on investors. The European markets were higher on Monday, while the U.S. bourses were closed for the Labor Day holiday - and the Asian markets are expected to open lower.
The JCI finished sharply higher on Monday following gains from the resource stocks and financial shares.
For the day, the index surged 57.62 points or 1.42 percent to finish at 4,117.95 after trading between 4,047.28 and 4,118.33.
Among the gainers, Bumi Resources spiked 5.7 percent, while Bank Mandiri climbed 1.28 percent and Astra International jumped 2.2 percent.
There is no lead from Wall Street, which was closed for the Labor Day holiday, while the news from Europe is mixed - with caution also growing ahead of Friday's all-important nonfarm payroll data from the United States.
Adding to the pessimistic outlook, ratings agency Moody's on Monday downgraded the European Union's outlook to negative from stable, citing a weakened outlook for the region's largest economies and deterioration in credit-worthiness of certain members. The EU's AAA rating was unaffected.
On the economic front, Germany's manufacturing activity declined more than initially estimated for August, final data from Markit Economics showed on Monday. The final Markit/BME Purchasing Managers' Index came in at 44.7 in August, down from the flash reading of 45.1, but rose from 43 in July.
In a separate report, the Eurozone's manufacturing sector continued to contract in August, but a slower pace than in July, survey results confirmed. However, the improvement was slightly weaker than estimated in the flash report. In the U.K., the Markit/Chartered Institute of Purchasing & Supply Purchasing Managers Index rose more than expected to 49.5 from 45.2 in July. Economists had forecast the index to rise to 46.3.
The major European markets were firmly higher on Monday as the DAX in Germany picked up 0.63 percent, while the CAC 40 in France surged 1.19 percent, London's FTSE collected 0.82 percent and the Swiss market added 0.78 percent.
In economic news, Indonesia's inflation rose slightly to 4.58 percent in August from 4.56 in July, Statistics Indonesia said on Monday, versus forecasts for 4.42 percent. Meanwhile, core inflation slowed to 4.16 percent from 4.28 percent a month ago.
The central bank has kept its interest rate unchanged at 5.75 percent for the sixth straight rate-setting meeting in August. The bank forecasts inflation to remain within the target range of 3.5 to 5.5 percent this year.
Also, the statistical office said exports fell 7.27 percent annually and imports rose 0.8 percent in July. The trade balance showed a deficit of $0.18 billion, smaller than the consensus forecast of $1.54 billion shortfall.
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