RTTNews - The Indonesian stock market finished higher on Monday for a third consecutive session, jumping more than 115 points or 5.5 percent in the process. The Jakarta Composite Index is closing on the 2,340-point plateau, and investors are optimistic that the market can break through that level when it opens for business on Tuesday.
The Asian markets can look to considerable optimism in Tuesday's global forecast as a resurgence in commodities and resources is predicted to lead the bourses firmly to the upside. Financials and steel stocks also are expected to provide support. The European and U.S. markets finished with strong gains, and the Asian markets are tipped to follow that lead.
The JCI finished modestly higher on Monday, boosted by gains among the financial and mining stocks.
For the day, the index gained 15.56 points or 0.67 percent to close at 2,338.80 after trading between 2,323.85 and 2,350.68. Volume was 10.570 billion shares worth 7.303 trillion rupiah.
Among the gainers, International Nickel Indonesia surged 8.1 percent, while Timah jumped 4.8 percent, Bank Danamon was up 2.1 percent, Bank Mandiri added 1.8 percent, Aneka Tambang jumped 4.6 percent and Perusahaan Gas Negara was up 1.4 percent.
Wall Street offers a broadly positive lead as stocks saw a significant rally on the first trading day of August, fueled by better-than-expected economic data. The major averages all finished in positive territory, with the NASDAQ and the S&P 500 moving past the key technical levels of 2,000 and 1,000, respectively.
Notable buying interest was generated by a report from the Institute for Supply Management that showed a much slower than expected pace of contraction in manufacturing activity in July. The report also showed notable improvements in new orders and production. The ISM said its index of activity in the manufacturing sector rose to 48.9 in July from 44.8 in June, although a reading below 50 indicates a contraction. Economists had been expecting a more modest increase to a reading of 46.5.
Separately, the U.S. Commerce Department revealed that construction spending rose 0.3 percent in June following a revised 0.8 percent slide in May. The figure surprised economists, who had expected a decline of 0.5 percent for the month. The unexpected increase was largely due to a 1.0 percent increase in public construction. While private construction slipped 0.1 percent, residential construction spending was up 0.5 percent.
Some positive sentiment was also generated by news that Ford (F) reported its first increase in U.S. sales in nearly two years in the month of July. Ford said its sales rose 2.3 percent compared to the same month a year ago due in part to the government's Cash for Clunkers program.
In earnings news today, Humana (HUM) and Tyson Foods (TSN) beat Wall Street estimates, while traders are looking forward to the release of results from homebuilding stalwarts Centex (CTX) and Pulte Homes (PHM) after the closing bell this afternoon.
The major averages all closed sharply higher, with the NASDAQ ending the session at its best level of the day. The Dow closed up by 114.95 points or 1.3 percent at 9,286.56, the NASDAQ climbed by 30.11 points or 1.5 percent to 2,008.61, and the S&P 500 rose by 15.15 points or 1.5 percent to 1,002.63. With the gains, the NASDAQ closed above the 2,000 level for the first time since October, while the S&P 500 closed above the 1,000 level for the first time since November. The Dow also set a nine-month closing high.
In economic news, the value of exports grew 27.21 percent year-on-year in June to US$9.33 billion, the statistics office said on Monday. At the same time, the value of imports fell 36.46 percent to US$ 7.95 billion. On month, the value of exports and imports increased by 1.32 percent and 4.08 percent respectively, in June. For the January to June period, exports value decreased 28.94 percent compared to the same period of the previous year.
Also, Statistics Indonesia said on Monday that the consumer price index rose 2.71 percent year-on-year in July, slowing from a 3.65 percent rise in the preceding month. Economists had expected an increase of 2.6 percent. On a monthly basis, consumer prices were up 0.45 percent compared to a 0.11 percent rise in June. For the January to July period, the CPI increased 0.66 percent compared to the same period of the previous year.
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