RTTNews - The Indonesian market on Wednesday snapped the three-day losing streak that had cost it more than 21 points or 1 percent in the process. The Jakarta Composite Index is on the verge of reclaiming the 2,060-point plateau, and investors are optimistic that the market will break through to that level at the opening of trade on Thursday.
The global forecast for the Asian markets is cautiously optimistic, thanks to better than expected economic data and sound corporate news. Strength among the commodities and oil companies are expected to push the regional bourses higher - especially after the European markets finished sharply higher and the U.S. bourses also ended with modest gains.
The JCI finished sharply higher on Wednesday, thanks to gains among the financials and the telecoms. For the day, the index was up 33.1 points or 1.63 percent to close at 2,059.88 after trading between 2,023.85 and 2,059.89.
Leading the gainers, Telekomunikasi Indonesia surged 5.3 percent, while Unilever Indonesia jumped 4.9 percent, Bank Central Asia was up 2.1 percent and Bank Mandiri gained 2.4 percent.
The lead from Wall Street is positive, although stocks were unable to hold onto their strong gains, steadily ceding ground over the course of Wednesday's session after moving sharply higher in morning trading. Nonetheless, the major averages all finished in positive territory amid yet another low volume session.
Early gains came on the heels of a report from the Institute for Supply Management, which said its index of activity in the manufacturing rose to 44.8 in June from 42.8 in May, although a reading below 50 indicates a contraction in the sector. The index came roughly in line with the expectations of economists, who forecast a reading of 44.6.
Separately, housing industry group NAR said its pending home sales index rose 0.1 percent to 90.7 in May from an upwardly revised reading of 90.6 in April. Economists had been expecting the index to come in unchanged compared to the 90.3 originally reported for the previous month.
The day's optimism was mitigated by data from the U.S. Commerce Department revealing that construction spending fell 0.9 percent in May following a revised 0.6 percent increase in the previous month. Economists had expected construction spending to fall by 0.6 percent compared to the 0.8 percent increase that was originally reported for April.
Meanwhile, ADP said that non-farm private employment fell by 473,000 jobs in June following a revised decrease of 485,000 jobs in May. Economists had expected a decrease of 394,000 jobs compared to the loss of 532,000 jobs originally reported for the previous month. While employment fell by more than expected, the decrease in jobs marked the smallest drop since October of 2008, when employment fell by 352,000 jobs.
On the earnings front, General Mills (GIS) reported adjusted fourth-quarter net income of $0.86, up 18 percent from $0.73 in the same period last year. Analysts expected the firm to report earnings of $0.80 per share. Shares of the consumer foods manufacturer climbed by 3.9 percent on the session as traders reacted to the better-than-expected earnings.
The major averages continued to give back ground going into the close but were able to finish in the green by comfortable margins. The Dow closed up by 57.06 points or 0.7 percent at 8,504.06, the NASDAQ rose by 10.68 points or 0.6 percent to 1,845.72 and the S&P 500 advanced by 4.01 points or 0.4 percent to 923.33.
In economic news, consumer prices in Indonesia rose 3.65 percent annually in June, slowing from a 6.04 percent rise in the preceding month, the Statistics Indonesia said Wednesday. Economists expected an increase of 3.85 percent. Compared to the previous month, consumer prices were up 0.11 percent compared to a 0.04 percent rise in May.
Separately, the statistical office said the value of exports grew 9.52 percent in May from April to $9.26 billion. At the same time, the value of imports rose 17 percent month-on-month to $7.85 billion. However, on a yearly basis, the value of exports was down 28.28 percent.
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