The Indonesia stock market has closed lower now in consecutive trading days, plummeting more than 85 points or 2.2 percent in the process. The Jakarta Composite Index settled just above the 3,830-point plateau, and now investors are bracing for continued consolidation when the market kicks off trade on Friday.
The global forecast for the Asian markets is mixed to lower on Friday, thanks to perpetual concerns about Europe plus soft economic data from the U.S. The European Central Bank President Mario Draghi said on Thursday that the bank cannot fix the turmoil in the currency bloc and urged Eurozone leaders to come up with a 'vision' for years ahead. In addition, Ireland is voting in a referendum, although opinion polls show that the country will back the new German-backed EU fiscal treaty. Across the pond, the U.S. saw weak reports on private sector job growth and initial jobless claims. The European and U.S. markets were mostly lower, and the Asian bourses are tipped to follow suit.
The JCI finished sharply lower on Thursday with broadly based losses, although the resource stocks were hit especially hard.
For the day, the index plummeted 85.09 points or 2.17 percent to finish at 3,832.82 after trading between 3,810.39 and 3,881.49.
Among the decliners, Bumi Resources plummeted 12 percent, while Adaro Energy plunged 7.6 percent, Aneka Tambang dropped 12 percent and Timah shed 4.9 percent.
The lead from Wall Street suggests mild negativity as stocks moved sharply lower in early trading on Thursday, although the markets later staged a notable recovery. Selling pressure re-emerged in late-day trading, however, resulting in a lower close.
The early sell-off followed a slew of U.S. economic data, including reports providing further signs of sluggishness in the labor market. Considerable selling pressure was generated by a report from payroll processor ADP showing weaker than expected private sector job growth.
ADP said private sector employment rose by 133,000 jobs in May following a downwardly revised increase of 113,000 jobs in April. Economists had expected an increase of about 154,000 jobs.
A separate report from the Labor Department showed that initial jobless claims rose to 383,000 in the week ended May 26 from the previous week's revised figure of 373,000. Jobless claims had been expected to come in unchanged at the 370,000 originally reported for the previous week.
The Commerce Department also reported slower than previously estimated first quarter GDP growth, dragging stocks lower along with a report showing that Chicago-area business activity expanded at a much slower rate in May.
The afternoon rebound was spurred by reports that the International Monetary Fund is in talks to provide a bailout to Spain, although the IMF later denied the reports. The pullback that followed came as traders expressed caution ahead of Friday's closely watched monthly employment report.
The major averages all ended the day in the red but well off their worst levels of the day. The Dow edged down 26.41 points or 0.2 percent to finish at 12,393.45, while the NASDAQ fell 10.02 points or 0.4 percent to end at 2,827.34 and the S&P 500 slipped 2.99 points or 0.2 percent to 1,310.33.
In economic news, Indonesia will on Friday provide April figures for imports, exports and trade balance, as well as May data for inflation. Imports were at $16.43 billion in March, while exports came in at $17.27 billion for a trade surplus of $0.84 billion. Inflation was up 4.50 percent on year and 0.21 percent on month in April, while core CPI added 5.13 percent on year and 0.62 percent on month.
by RTT Staff Writer
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