RTTNews - The Indonesian stock market has finished higher now in two straight sessions, gathering more than 50 points or 2.1 percent en route to a fresh 13-month closing high. The Jakarta Composite Index finished just shy of the 2,400-point plateau, although investors are bracing for a modest decline by the opening of trade on Wednesday.

The global forecast for the Asian markets is fairly pessimistic as investors are likely to be cautious ahead of the Federal Open Market Committee's comments on Wednesday about the state of the U.S. economy. Financials and properties are likely to be under pressure, along with some of the resource stocks. The European and U.S. markets finished sharply lower, and the Asian bourses are also expected to trade to the downside.

The JCI finished modestly higher on Tuesday, carried to the upside by gains among the miners and other commodities.

For the day, the index added 9.74 points or 0.41 percent to close at 2,399.27 after trading between 2,370.68 and 2,404.74. Volume was 15.36 billion shares worth 7.87 trillion rupiah. There were 101 gainers and 100 decliners, with 79 stocks finishing unchanged.

Among the gainers, Aneka Tambang jumped 12.5 percent, while Indofood Sukses Makmur surged 5.2 percent, Sampoerna Agro rose 11.5 percent, Astra Agro Lestari gained 4.9 percent, London Sumatera Plantations gained 5.5 percent, Bakrie Sumatera Plantations soared 8.2 percent, Antam surged 12.5 percent and Timah gained 4.5 percent.

Wall Street offers a negative lead as stocks posted notable losses on Tuesday, with traders doing some additional profit taking ahead of key economic data due out in the second half of the week. The major averages all ended the day firmly in negative territory, adding to the moderate losses posted in the previous session.

On the economic front, traders largely shrugged off the Labor Department's report showing a much bigger than expected increase in productivity in the second quarter. The growth came as hours worked fell at a faster pace than output. At the same time, the report also showed a steep drop in unit labor costs. The report said that productivity increased by 6.4 percent in the second quarter compared to a downwardly revised 0.3 percent increase in the first quarter. Economists had expected productivity to increase by 5.5 percent.

Meanwhile, the Labor Department also said that unit labor costs fell by 5.8 percent in the second quarter following a revised 2.7 percent decrease in the first quarter. The steep drop in costs exceeded the expectations of economists, who had expected a 2.5 percent drop.

Separately, the Commerce Department released a report showing that wholesale inventories fell by much more than expected in the month of June, although the report also showed a modest increase in wholesale sales. The report showed that wholesale inventories fell 1.7 percent in June following a revised 1.2 percent decrease in May. Economists had expected inventories to fall 0.9 percent compared to the 0.8 percent drop originally reported for the previous month.

Traders are also looking to the two-day Federal Open Market Committee meeting that began today, although the Fed's rate decision is not expected to be revealed until tomorrow afternoon. The central bank is widely expected to keep the fed funds futures rate unchanged. However, the Fed's commentary on growth and inflation and any additional information on quantitative easing measures have the potential to move the markets.

The major averages all ended the day notably lower, although they were well off their worst levels of the day. The Dow closed down by 96.50 points or 1 percent at 9,241.45, the NASDAQ slipped by 22.51 points or 1.1 percent to 1,969.73 and the S&P 500 fell by 12.75 points or 1.3 percent to 994.35.

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