RTTNews - Ahead of Thursday's market holiday for the Ascension, the Indonesian stock market on Wednesday saw an end to the modest two-day winning streak in which it had gained more than 130 points or 7.5 percent on its way to a high point for 2009. The Jakarta Composite Index is holding on to support at 1,880 points, but investors are bracing for a modest pullback in thin trade at the opening of trade on Friday.
The global forecast for the Asian markets is pessimistic, with the financial shares expected to come under pressure after it was announced that Britain's AAA credit rating might be in jeopardy. Downbeat economic data reinforces the negative sentiment. The European markets finished sharply lower, as did the U.S. markets - and the Asian bourses are also predicted to take a hit.
The JCI finished barely lower on Wednesday, in thin trade ahead of the holiday. For the day, the index eased 0.29 points or 0.02 percent to close at 1,885.72 after trading between 1,872.26 and 1,907.49.
Wall Street offers a negative lead as stocks finished Thursday's session significantly lower after mild losses in the previous session. The major averages all closed in firmly negative territory as trader optimism dampened following the release of largely disappointing economic data.
The retreat came on the heels of another uninspiring jobs report from the U.S Labor Department for the week ended May 16. The data showed that first time jobless claims slowed but continuing claims rose for yet another week, reaching a new historic high. Meanwhile, the Philadelphia Federal Reserve's business activity index for the first half of May showed improvement but rose by less than expected, further mitigating risk appetite.
Some of the pessimism was moderated by forward looking indicators for April from the Conference Board, which came in slightly better than expected, raising some economic prospects for the coming months.
The broad-based losses on the day came as traders did some profit taking following the recent run-up seen in equities. In addition, with no considerable news on tap for Friday's session and markets closed on Monday for Memorial Day, equity markets worldwide saw considerable pullbacks.
The major averages opened notably lower following the jobs report and lingered in negative territory throughout the day, before finishing just off of their daily lows. Subsequently, the Dow closed down by 129.91 points or 1.54 percent to finish at 8292.13, the NASDAQ finished down by 32.59 points or 1.89 percent to end at 1695.25, and the S&P 500 also fell, closing down by 15.14 points or 1.68 percent to finish at 888.33.
In economic news, Indonesia recorded a current account surplus of US$1.79 billion in the first quarter, reversing three consecutive quarters of deficits, a report from the Bank Indonesia showed. In the fourth quarter, the current account deficit stood at US$677 million.
During the first quarter, the surplus in the goods account increased to US$6.2 billion from US$4.15 billion in the fourth quarter. At the same time, the deficit in the services account decreased to US$2.5 billion from US$3.3 billion in the fourth quarter.
However, the income account deficit widened to US$3.03 billion from US$2.8 billion in the preceding quarter, and the surplus in the current transfers account reduced to US$1.14 billion from US$1.3 billion in the fourth quarter.
Meanwhile, the capital and financial account showed a surplus of US$2.36 billion in the first quarter, in contrast to a deficit of US$4.1 billion in the fourth quarter.
In the three months ended March, the international reserves stood at US$54.8 billion, sufficient to finance 6.1 months of imports and official external debt service payments, the central bank said.
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