RTTNews - The Indonesian stock market has stretched its winning streak to three sessions, gathering nearly 50 points or 2.5 percent in the process. The Jakarta Composite Index has reclaimed the 2,075-point plateau, although analysts say the market could slide right back through that level by the opening of trade on Monday.
The global forecast for the Asian markets provides little in the way of guidance, especially with no lead from Wall Street as the U.S. bourses were closed on Friday in observance of Independence Day. With the absence of any fresh data, many investors are expected to remain on the sidelines - especially with Q2 earnings season kicking off later this week. The European markets finished slightly lower on Friday, and the Asian markets are expected to track flat to mildly negative.
Investors also may be cautious ahead of this week's presidential election.
The JCI finished modestly higher on Friday, as gains among the telecoms and financials were dented by selling among the commodity stocks. Sentiment was also helped by a cut in interest rates from the central bank.
For the day, the index gained 9.55 points or 0.5 percent to close at 2,075.30 after trading between 2,039.08 and 2,078.05. Volume was 4.2 billion shares worth 2.7 trillion rupiah. Among the actives, Inovisi Infracom surged 16 percent, while Bumi Resources shed 2.2 percent, Bayan Resources lost 1.9 percent and Indika Energy added 6.5 percent.
The lead from the European markets is mildly negative as markets fell in light volume for the second straight day on Friday, as a report showed Eurozone retail sales dropped more than expected in May and mining stocks edged lower after copper prices declined. Eurozone retail sales fell 0.4 percent month-on-month in May following a revised increase of 0.1 percent in April, data released by the Eurostat showed. Economists had expected a drop of just 0.1 percent.
The FTSEurofirst 300 index of pan-European blue chips closed 0.06 percent lower at 842.52 points, while the narrower DJ Stoxx 50 index rose 0.06 percent to 2,077.28 points. Around Europe, Germany's DAX index fell 0.22 percent to 4,708.21, while the U.K.'s FTSE 100 index rose 0.05 percent to 4,236.28 and France's CAC 40 index surged up 0.10 percent to 3,119.51.
Metro, Germany's biggest retailer, slipped 2.5 percent, as European retail sales dropped more than economists estimated. BHP Billiton, the world's biggest miner, fell 1.4 percent, while Anglo American, the second biggest, declined 1.2 percent and Rio Tinto, the third biggest, slipped 2.2 percent. EDF, Europe's biggest power producer, dropped 4.5 percent after Morgan Stanley downgraded the stock to equal weight from overweight.
On the other hand, banking stocks were among the top gainers. HSBC, Europe's largest bank, rose 1.7 percent, while Royal Bank of Scotland, Britain's second largest bank, climbed 2.3 percent and Barclays, Britain's third largest bank, surged up 2.7 percent. BNP Paribas, France's largest bank, gained 2 percent and Deutsche Bank, Germany's biggest lender, added 1.7 percent.
In economic news, Indonesia's central bank on Friday lowered its key interest rate for the eighth consecutive month to a new low. The Bank Indonesia cut its benchmark rate by 25 basis points to an all-time low of 6.75 percent. The central bank's rate cut decision was in line with economists' expectations.
In June, the central bank had slashed the rate by a quarter-point to 7 percent. Including the latest cut, the central bank made a total reduction of 275 basis points since December last year.
Indonesia is continuing its monetary easing at a time when most of the other central banks stopped reducing their rates. In an accompanying statement, the central bank hinted that the rate-cut cycle would reach its end soon.
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