The Indonesia stock market on Wednesday halted the three-day winning streak in which it had risen more than 70 points or 1.9 percent. The Jakarta Composite Index finished just above the 3,995-point plateau, and now traders are bracing for additional selling pressure when the market opens on Thursday.
The global forecast for the Asian markets suggests mild consolidation thanks to renewed concerns over the lingering debt situation in Europe. Uninspired economic and corporate earnings news from the United States adds to the cautious sentiment. Financials and technology stocks figure to weigh on investors, while gold and oil shares should provide support. The European and U.S. markets finished lower on Wednesday, and the Asian bourses are expected to open in similar fashion.
The JCI finished slightly lower on Wednesday following losses among the automobile producers and the consumer sector.
For the day, the index lost 7.93 points or 0.20 percent to finish at 3,995.02 after trading between 3,979.09 and 4,002.68. Volume was 4.31 billion shares worth 4.01 trillion rupiah. There were 117 gainers and 113 decliners.
Among the decliners, Astra International shed 1.9 percent, while Unilever Indonesia lost 1.3 percent and Indofood CBP fell 1.8 percent.
The lead from Wall Street is modestly negative as stocks moved mostly lower on Wednesday, although selling pressure was relatively subdued. Lingering concerns about the outlook for the European economy weighed on the markets once again.
The weakness followed a report showing a contraction in private sector activity in the Eurozone, which added to recent concerns about a recession. Markit Economics revealed that its index of Eurozone private sector activity unexpectedly dipped below the '50' cut-off mark to 49.7 in February.
Traders also reacted to news that Fitch Ratings downgraded Greece's credit rating to 'C' from 'CCC' following the Eurozone's agreement on a second bailout for the country. Fitch said a default is highly likely in the near term.
On the corporate front, luxury homebuilder Toll Brothers (TOL) came under pressure after reporting a first quarter loss of $0.02 per share compared to analyst estimates for a profit of $0.02 per share. Meanwhile, Brocade (BRCD) rose by 2.7 percent after reporting better than expected first quarter earnings and issuing in-line guidance for its second quarter.
In U.S. economic news, the National Association of Realtors reported a notable increase in existing home sales in January, although the report also showed a significant downward revision to the data for December.
The major averages posted modest losses on the day after ending the previous session mixed. The Dow edged down 27.02 points or 0.2 percent to finish at 12,938.67, while the NASDAQ fell 15.40 points or 0.5 percent to 2,933.17 and the S&P 500 slipped 4.55 points or 0.3 percent to 1,357.66.
by RTT Staff Writer
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