RTTNews - The losing streak has hit three sessions now for the Indonesian stock market, costing it more than 21 points or 1 percent along the way. The Jakarta Composite Index has fallen through support at 2,030 points, and now analysts are expecting the market to continue to trend to the downside when it opens for business on Wednesday.
The global forecast for the Asian markets is laced with pessimism, with continued selling pressure expected for the financials and commodities. Some disappointing economic data out of the United States adds to the negative sentiment that suggests that a global recovery might not be as close as many had thought. The European markets were sharply lower, while the U.S. markets also ended in the red - and the Asian bourses are also expected to follow suit and trade lower.
The JCI finished slightly lower on Tuesday, dragged to the downside by weakness among the financials and the commodities.
For the day, the index lost 6.93 points or 0.34 percent to close at 2,026.78 after trading between 2,020.69 and 2,060.73. Volume was 4.73 billion shares worth 2.73 trillion rupiah. There were 117 decliners and 83 gainers, with 60 stocks finishing unchanged.
Among the decliners, Bank Rakyat was down 4.6 percent, while Bank Mandiri shed 1.55 percent, Timah lost 6.9 percent, Bumi Resources lost 1.6 percent and Bank Rakyat Indonesia shed 4.6 percent.
The lead from Wall Street is firmly negative as stocks turned sharply lower as traders digested consumer confidence figures that fell short of expectations after kicking off Tuesday's session showing a mild upward move. The major averages all finished solidly in negative territory, offsetting Monday's gains.
A report from the Conference Board said its consumer confidence index fell to 49.3 in June from a revised 54.8 in May. The decrease surprised economists, who had expected the index to edge up to 55.3 from the 54.9 originally reported for the previous month. The decrease reflected less favorable assessments of both current conditions and the near-term outlook.
Separately, the Institute for Supply Management - Chicago said its index of activity in the manufacturing sector jumped to 39.9 in June from 34.9 in May, although a reading below 50 indicates a continued contraction. Economists had been expecting the index to increase to a reading of 39.0.
Earlier, the S&P Case-Shiller Home Price Index, a closely watched measure of home prices, showed a 0.6 percent decline from March to April, according to a survey of prices in 20 U.S. cities. Home prices were down 18.1 percent compared to the same period last year.
On the corporate front, chipmaker Broadcom (BRCM) announced that it raised its tender offer to acquire all of the outstanding shares of common stock of Emulex (ELX) to $11.00 per share in cash, representing a total equity value of about $912 million. Emulex said its Board of Directors would review the terms of the revised offer.
In earnings news, private education firm Apollo Group (APOL) reported third quarter net income of $1.26 per share, compared to $0.85 per share in the prior year quarter. The earnings beat Wall Street analyst forecasts of $1.12 per share. The stock climbed by 7.8 percent on the day.
Further, tax preparer H&R Block (HRB) reported fourth quarter net income of $2.09 per share, compared to $1.66 per share in the year-ago quarter. The results edged out analyst expectations of $2.05 per share. H&R Block also said it expects fiscal 2010 earnings in the range of $1.60 to $1.80 per share. Analysts currently expect the company to earn $1.66 per share for the year. The stock rose by 10 percent on the day as traders reacted to the news.
The major averages moved off their worst levels late in the session but still posted notable losses. The Dow closed down by 82.38 points or 1 percent at 8,447.00, the NASDAQ dipped by 9.02 points or 0.5 percent to 1,835.04, and the S&P 500 fell 7.91 points or 0.9 percent to 919.32.
In economic news, Indonesia will on Wednesday provide May numbers for imports, exports, trade balance and inflation. Analysts are expecting imports to drop 42.9 percent on year after the 44.5 percent annual contraction in April. Exports are seen lower by 30.3 percent on year following the 22.9 percent annual decline in the previous month. The trade balance is expected to show a surplus of $2.3 billion after the $2.08 billion surplus a month earlier. Inflation is forecast to come in at 3.85 percent after showing 6.04 percent in April.
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