More Pain Expected For Jakarta Shares

By @ibtimes on

RTTNews - The Indonesian stock market has stretched its losing streak to three sessions, shedding more than 90 points or 4 percent in the process. The Jakarta Composite Index fell through support at the 2,300-point plateau, and now investors are bracing for continued declines when the market opens for business on Thursday.

The global forecast provides little in the way of guidance for the Asian markets, although a touch of downside could drag the markets lower. Housing stocks and financials are expected to extend losses from the previous session, although gold miners are predicted to surge. The European and U.S. markets finished slightly lower, and the Asian markets are also expected to track to the downside.

The JCI finished sharply lower on Wednesday, with trade continuing uninterrupted despite an earthquake that shook the Indonesian capital. Miners and commodities led the market to the downside.

For the day, the index plunged 41 points or 1.76 percent to close at 2,285.93 after trading between 2,272.76 and 2,325.88. Volume was 4.85 billion shares worth 3.84 trillion rupiah. There were 178 decliners and 34 gainers.

Among the actives, Bumi Resources shed 3.5 percent, while Batubara Bukit Asam lost 2.7 percent, Aneka Tambang fell 2.2 percent and Indofood Sukses Makmur added 5.1 percent.

Wall Street puts forth a mildly pessimistic lead as stocks lingered near the unchanged mark for much of the trading day before a tame late session sell-off resulted in a modestly lower close on Wednesday. The major averages all closed on the downside, as traders largely shrugged off today's economic data and looked towards key employment data to close out the week.

The Federal Reserve released the minutes of its August meeting, indicating that the members of the Federal Open Market Committee are more confident that the economic downturn is ending and that growth is likely to resume in the second half of the year. The committee members said that their projections for the second half of 2009 and for subsequent years had not changed appreciably since the June meeting, except that they now saw smaller downside risks.

Nonetheless, while the members saw signs of stabilization in consumer spending and housing, most agreed that the economy is likely to recover only slowly during the second half of this year and all saw it as still vulnerable to adverse shocks.

In other economic news today, the Commerce Department issued a report showing that factory orders increased by less than economists had been expecting in July.

Meanwhile, Automatic Data Processing, Inc. (ADP) said that non-farm private employment fell by more than economists had been anticipating in August, although the loss of jobs still marked the smallest drop in employment since September of 2008.

Separately, the Labor Department released its revised report on labor productivity in the second quarter, showing that productivity increased by more than previously estimated amid a smaller than expected drop in output.

The major averages saw some downside in late session trading, resulting in a lower close. The Dow closed down 29.93 points or 0.3 percent at 9,280.67, the NASDAQ fell by 1.82 points or 0.1 percent to 1,967.07 and the S&P 500 declined by 3.29 points or 0.3 points to close at 994.75.

In economic news, the Indonesian central bank is scheduled to announce its monthly decision on interest rates on Thursday. Analysts are expecting the bank to keep rates on hold at the current level of 6.5 percent.

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