RTTNews - One session after ending the two-day losing streak that had cost it more than two dozen points or 1 percent, the Indonesian stock market turned right back to the downside again on Monday. The Jakarta Composite Index fell through support at the 2,350-point plateau, and now analysts are predicting continued declines at the opening of trade on Tuesday.
The global forecast for the Asian markets remains solidly pessimistic after most of the markets saw heavy losses in Monday's trade. Resource stocks are expected to remain under pressure following a fall in commodity prices, while airlines, properties and financials also could see significant losses. The European and U.S. markets finished broadly negative, and the Asian markets are also tipped to move to the downside.
The JCI finished sharply lower on Monday, following heavy losses in the mainland Shanghai market. Property stocks led the market to the downside, while the construction sector also finished with heavy losses.
For the day, the index dropped 35.71 points or 1.5 percent to finish at 2,341.53 after trading between 2,333.31 and 2,378.29. Volume was 5.2 billion shares worth 4.2 trillion rupiah. There were 165 decliners and 31 gainers.
Among the decliners, Telekomunikasi Indonesia shed 2.9 percent, while Bank Rakyat Indonesia lost 3.2 percent and Bank Central Asia dropped 2.3 percent. Finishing higher, Indocement Tunggal Prakarsa added 3.1 percent and Perusahaan Gas Negara gained 0.7 percent.
The lead from Wall Street is firmly negative as stocks remained mostly negative throughout the trading day on Monday after moving sharply lower in early trading. While the major averages did not see much follow-through on their initial downward move, they remained stuck in the red.
The weakness in the markets came as a sell-off in the Chinese stock market inspired some traders to cash in on recent strength. Nonetheless, selling pressure remained relatively subdued ahead of the release of some key economic data later this week.
Traders largely shrugged off the results of the Institute for Supply Management - Chicago's survey of regional manufacturing activity, which showed that activity unexpectedly reached neutral territory in August following ten consecutive months of contraction. The index of manufacturing activity rose to 50.0 in August from 43.4 in July, with a reading of 50 acting as the breakeven point versus contraction and expansion. Economists had been expecting a more modest increase to a reading of 48.0.
In corporate news, Walt Disney (DIS) announced that it has agreed to acquire Marvel Entertainment (MVL) in a stock and cash transaction. Marvel shareholders will receive a total of $30 per share in cash plus approximately 0.745 Disney shares for each Marvel share they own.
The major averages moved well off their lows going into the close, although they still ended the day firmly in negative territory. The Dow closed down by 47.92 points or 0.5 percent at 9,496.28, the NASDAQ fell by 19.71 points or 1 percent to 2,009.06 and the S&P 500 slipped by 8.31 points or 0.8 percent to close at 1,020.62.
In economic news, Indonesia will on Tuesday provide July numbers for imports, exports and trade balance, along with August inflation figures. Imports are expected to fall 35 percent on year after the 34.3 percent annual contraction in June. Exports are called lower by 23.5 percent on year after the 27.2 percent annual fall in the previous month. The trade balance is expected to show a surplus of $1.3 billion following the $1.377 billion surplus in June. Inflation is tipped to increase 2.7 percent on year after coming in 2.71 percent higher in July.
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