Rebound Anticipated For Indonesia Stock Market

The Indonesia stock market has finished lower in two of three trading days since the end of the six-day winning streak in which it had rallied more than 410 points or 4.7 percent. The Jakarta Composite Index now sits just above the 8,880-point plateau although it may bounce higher again on Tuesday.

The global forecast for the Asian markets is upbeat, with oil prices being the main catalyst to the upside. The European and U.S. markets were slightly higher and the Asian bourses are expected to open in similar fashion.

The JCI finished modestly lower on Monday following mixed performances from the financial shares, cement companies and resource stocks.

For the day, the index sank 52.03 points or 0.58 percent to finish at 8,884.72 after trading between 8,715.41 and 9,000.97.

Among the actives, Bank CIMB Niaga shed 0.55 percent, while Bank Mandiri rose 0.21 percent, Bank Negara Indonesia collected 0.96 percent, Bank Central Asia slumped 1.23 percent, Bank Rakyat Indonesia added 0.54 percent, Indosat Ooredoo Hutchison gained 0.46 percent, Indocement fell 0.36 percent, Semen Indonesia improved 0.76 percent, United Tractors lost 0.48 percent, Astra International jumped 1.82 percent, Energi Mega Persada stumbled 2.71 percent, Astra Agro Lestari tanked 2.53 percent, Aneka Tambang surged 5.51 percent, Vale Indonesia vaulted 1.59 percent, Timah slipped 0.29 percent, Bumi Resources plummeted 5.63 percent and Bank Danamon Indonesia and Indofood Sukses Makmur were unchanged.

The lead from Wall Street suggests mild upside as the major averages opened lower on Monday but managed to break into the green shortly thereafter.

The Dow added 86.13 points or 0.17 percent to finish at 49,590.20, while the NASDAQ gained 62.56 points or 0.26 percent to close at 23,733.90 and the S&P 500 rose 10.99 points or 0.16 percent to end at 6,977.27.

The initial pullback on Wall Street reflected concerns about the Federal Reserve’s independence after Fed Chair Jerome Powell revealed that the U.S. central bank has been served subpoenas by the Department of Justice that threaten criminal charges.

Powell termed this action “unprecedented” and ascribed it to President Donald Trump’s ongoing threats and pressure on the Fed to lower interest rates.

Selling pressure waned over the course of the session, however, as traders remain optimistic about the outlook for interest rates. While the Fed is widely expected to leave interest rates unchanged at its next meeting later this month, the central bank is still likely to cut rates by at least another quarter point in the coming months.

Crude oil prices climbed on Monday as the increasing possibility of U.S. intervention to end the Iran turmoil sets off production disruption concerns. West Texas Intermediate crude for February delivery was up $0.33 or 0.51 percent at $59.42 per barrel.