RTTNews - The losing streak has reached three sessions for the Indonesian stock market, which has given away more than 120 points or 5 percent in the process. The Jakarta Composite Index closed below the 2,280-point plateau, although investors are optimistic that the market will turn modestly back to the upside at the opening of trade on Thursday.
The global forecast for the Asian markets is cautiously optimistic, with bourses likely to rebound modestly after sharp declines throughout much of the region in the previous session. The markets are likely to see strength in the oil and commodity stocks, as well as the pharmaceutical shares - while those gains may be offset by selling in the airline and property sectors. The European markets finished close to the unchanged line on either side, while the U.S. markets ended modestly higher - and the Asian bourses are forecast also to open slightly to the upside.
The JCI finished sharply lower on Wednesday, borrowing pessimism in the afternoon from another selloff in China. Mining stocks led the market to the downside, while agricultural stocks also finished under pressure.
For the day, the index plunged 59.24 points or 2.53 percent to close at 2,277.75 after trading between 2,271.21 and 2,351.18. Volume was 8.14 billion shares worth 6.33 trillion rupiah. There were 201 decliners and 19 gainers, with 38 stocks finishing unchanged.
Among the decliners, Bumi Resources plunged 7.1 percent, while Perusahaan Gas Negara shed 5.2 percent, Aneka Tambang dropped 7.8 percent, Timah shed 8.9 percent, Astra Agro Lestari was off 5.2 percent, Bakrie Sumatera Plantations declined 8.4 percent, Indofood Sukses Makmur shed 6.1 percent and Bank Danamon was down 4.4 percent.
The lead from Wall Street is modestly positive as stocks were able to recover from early weakness and finished notably higher on Wednesday, largely driven by a report indicating a jump in oil demand. The major averages all closed in positive territory by solid margins, further offsetting Monday's losses.
With no significant news on the economic front, the day's crude oil inventories report received extra attention. Inventories unexpectedly fell in the week ended August 14, according to data released this morning by the Energy Information Administration.
Oil prices surged above $70 a barrel after the report was made public, resulting in significant strength among oil-related stocks, which largely spearheaded today's rally. Crude for September delivery eventually closed up $3.23 at $72.42 a barrel.
The EIA said crude oil inventories decreased by 8.4 million barrels, while analysts expected to see an increase of about 1.1 million barrels for the week. At 343.6 million barrels, however, crude oil inventories remain above the upper boundary of the average range for this time of year.
Earlier, traders reacted to the latest set of corporate quarterly results, with Hewlett-Packard (HPQ) reporting third quarter earnings of $0.91 per share after the closing bell Tuesday, beating the consensus estimate of $0.90 per share. The company expects to report fourth quarter earnings of $1.12 per share compared to the forecast of $1.07 per share.
Deere & Co. (DE) reported third-quarter net income of $0.99 per share, compared with $1.32 per share in the same period last year. The results topped Wall Street estimates of $0.57 per share. Looking forward, Deere said it expects full year net income of $1.1 billion despite expectations for the largest single-year sales decline in at least 50 years.
BJ's Wholesale Club (BJ) reported second quarter net income of $0.64 per share, compared to $0.61 per share in the prior year quarter. Analysts had expected the firm to earn $0.62 per share.
In other news, Ellen Hughes-Cromwick, chief economist of Ford Motor Co. (F), was quoted as saying that economic indicators in the U.S are showing that a recovery is already underway and that auto sales seem to be stabilizing. Hughes-Cromwick also predicted that Ford would see an improvement in sales in 2010.
The major averages saw choppy movement in late-session dealing, finishing near their best levels of the day. The Dow closed up by 61.22 points or 0.7 percent at 9,279.16, the NASDAQ climbed by 13.32 points or 0.7 percent to 1,969.24 and the S&P 500 rose by 6.79 points or 0.7 percent to 996.46.
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