RTTNews - The Indonesian stock market on Tuesday stretched its winning streak to four sessions, collecting more than 135 points or 6.5 percent along the way. The Jakarta Composite Index closed above the 2,360-point plateau, although investors are anticipating that the rally could run out of steam at the opening of trade on Wednesday.
The global forecast for the Asian bourses offers little guidance with a flat opening likely in the cards. Financials and properties are expected to extend gains, but they'll likely be countered by profit taking among the oil, steel and retail stocks. The European markets finished modestly in negative territory, while the U.S. markets ended slightly positive - and the Asian markets are also expected to hover around the unchanged line.
The JCI finished modestly higher on Tuesday, thanks to another strong session from the miners and commodities. The gains were limited by weakness among the financials and the telecommunication stocks.
For the day, the index added 21.29 points or 0.9 percent to close at 2,360.09 after trading between 2,339.00 and 2,382.10. Volume was 13.87 billion shares worth 7.96 trillion rupiah. There were 115 gainers and 98 decliners, with 72 stocks finishing unchanged.
Among the gainers, Bumi Resources gained 2.8 percent, while Adaro Energy added 3.9 percent, Bakrie & Brothers surged 13.6 percent, Energi Mega Persada rose 2.7 percent, Batubara Bukit Asam was up 3 percent and Indo Tambangraya Mega jumped 5.1 percent. Bucking the trend, Telekomunikasi Indonesia shed 1.1 percent and Bank Mandiri lost 1.1 percent.
Wall Street offers a barely positive lead as stocks ended Tuesday's trading on a positive note amid some late session buying interest following a choppy session. The major averages all finished in positive territory by moderate margins, building on yesterday's strong gains that helped the NASDAQ and S&P 500 cross key levels.
On the economic front, the National Association of Realtors released a report showing that pending home sales growth in June exceeded economist estimates by a wide margin. With the increase, pending sales rose for the fifth consecutive month. NAR said its pending home sales index jumped 3.6 percent to 94.6 in June from an upwardly revised reading of 91.3 in May. Economists had been expecting a much more modest increase by the index of about 0.7 percent.
Earlier, the Commerce Department released a report showing that personal spending increased by slightly more than expected, while personal income fell by more than expected. The report showed that personal spending rose 0.4 percent in June following a revised 0.1 percent increase in May. Economists had been expecting spending to increase by 0.3 percent compared to the 0.3 percent increase originally reported for the previous month.
At the same time, the Commerce Department said that personal income fell by 1.3 percent in June after increasing by a revised 1.3 percent in the previous month. The decrease compares to economist estimates of a 1.0 percent decline. Subsequently, the report said that personal saving as a percentage of disposable personal income was 4.6 percent in June compared with 6.2 percent in May.
On the earnings front, Centex (CTX) was one of the few bright spots among a slew of disappointing results that included Pulte (PHM), D.R. Horton (DHI), Archer Daniels Midland (ADM) and Tenet Healthcare (THC), among others.
The major averages showed a notable upward move going into the close, climbing back above the unchanged line. The Dow closed up by 33.63 points or 0.4 percent at 9,320.19, the NASDAQ advanced by 2.70 points or 0.1 percent to 2,011.31 and the S&P 500 rose by 3.02 points or 0.3 percent to 1,005.65.
In economic news, the Indonesian central bank will on Wednesday hold its monetary policy meeting and then announce its decision on interest rates. Analysts are widely predicting that the bank will trim rates by 25 basis points, from 6.75 percent to 6.50 percent.
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