The Indonesia stock market has fallen lower now in three consecutive trading days, retreating more than 85 points or 2.2 percent along the way. The Jakarta Composite Index finished just below the 3,860-point plateau, and now analysts are forecasting continued selling pressure at the opening of trade on Tuesday.
The global forecast for the Asian markets remains negative on lingering concerns about the ongoing European debt crisis. Spain has now formally asked for a bailout to shore up its ailing banking sector, and it was quickly followed by a similar request from Cyprus. In addition, Moody's downgraded 28 Spanish banks - although better than expected economic data from the U.S. may provide support. The European and U.S. markets finished sharply mower, and the Asian bourses are also expected to open in the red.
The JCI finished modestly lower on Monday following losses from the resource stocks.
For the day, the index fell 31.93 points or 0.8 percent to finish at 3,857.59 after trading between 3,848.85 and 3,893.47.
Among the decliners, Adaro Energy shed 2.9 percent, while Indika Energy lost 2.7 percent, Borneo Lumbung Energi plunged 5.3 percent and Vale Indonesia fell 3 percent.
The lead from Wall Street suggests continued consolidation as stocks moved sharply lower during trading on Monday after seeing considerable volatility last week. Lingering concerns about the ongoing European debt crisis weighed on the markets amid worries about the impact on the global economy.
The sell-off came as traders kept a close eye on the latest developments in Europe, where Spain formally asked for a bailout to shore up its ailing banking sector. Europe is likely to remain in focus throughout the week, as European leaders are due to hold a summit to discuss the ongoing debt crisis on Thursday and Friday.
Meanwhile, traders largely shrugged off a report from the Commerce Department showing a bigger than expected increase in U.S. new home sales.
The report showed sales of new single-family homes at a seasonally adjusted annual rate of 369,000 in May, a 7.6 percent increase from the revised April rate of 343,000. Economists had expected new home sales to climb to 350,000. With the much bigger than expected increase, new home sales in May came in at their highest level since April of 2010.
After moving sharply lower in early trading, the major averages remained stuck firmly in the red throughout the session. The Dow fell 138.12 points or 1.1 percent to finish at 12,502.66, while the NASDAQ tumbled 56.26 points or 2 percent to end at 2,836.16 and the S&P 500 slid 21.30 points or 1.6 percent to 1,313.72.
by RTT Staff Writer
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