The Indonesia stock market bounced right back to the upside again on Friday, one session after it had ended the modest two-day winning streak in which it had risen almost 80 points or 5 percent. The Jakarta Composite Index settled just above the 3,955-point plateau, and now analysts are forecasting another firm start for the market at the opening of trade on Monday.
The global forecast for the Asian markets is positive following upbeat news from Europe - although profit-taking may set in later in the day, as the regional bourses have already had the chance to react to the news. European leaders have agreed to make use of Eurozone's bailout funds to recapitalize the region's banks. The European and U.S. markets finished sharply higher, and the Asian bourses are expected to open in similar fashion.
The JCI finished sharply higher on Friday following gains from the resource stocks.
For the day, the index surged 28.01 points or 1.8 percent to finish at 3,955.58 after trading between 3,903.66 and 3,971.08.
Among the gainers, Perusahaan Gas Negara climbed 3.7 percent, while Hexindo Adiperkasa spiked 5.2 percent and Vale Indonesia soared 7 percent.
The lead from Wall Street is broadly optimistic as stocks moved sharply higher on Friday, extending the strong upward move in the previous session. Much of the strength followed developments in Europe as European Council President Herman Van Rompuy said that European leaders will spend 120 billion euros on measures to stimulate growth and create jobs.
Van Rompuy said the leaders also agreed to permit the European Financial Stability Facility and the European Stability Mechanism to directly recapitalize ailing banks after a single European banking regulator is commissioned.
Additionally, the leaders agreed that ESM loans to Spanish banks will not have senior creditor status. The European Central bank is set to act as an agent for the rescue funds in market operations.
Traders largely shrugged off mixed U.S. economic data, including a report from Thomson Reuters and the University of Michigan showing that consumer sentiment fell by even more than estimated in June. The consumer sentiment index was downwardly revised to 73.2 from the mid-month reading of 74.1. With the revision, the consumer sentiment index is down sharply from the nearly five-year high of 79.3 in May.
A separate report from the Institute for Supply Management - Chicago showed that Chicago-area business activity saw a modest acceleration in the pace of growth in June, with the Chicago business barometer inching up to 52.9 in June from 52.7 in May.
Despite the strong upward moved by the broader markets, Research in Motion (RIMM) fell sharply after the BlackBerry maker reported weaker than expected first quarter results and provided disappointing guidance. Shares of RIM tumbled 19.1 percent.
The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow jumped 277.83 points or 2.2 percent to finish at 12,880.09, while the NASDAQ soared 85.56 points or 3 percent to end at 2,935.05 and the S&P 500 surged 33.12 points or 2.5 percent to 1,362.16. With the gains, the major averages all moved higher for the week. The NASDAQ rose by 1.5 percent, while Dow and the S&P 500 jumped 1.9 percent and 2 percent, respectively.
In economic news, Indonesia will on Monday provide May figures for imports, exports and trade balance, plus June data for inflation. The trade balance is expected to reflect a surplus of $128 billion following the $0.64 billion deficit in April. Imports were worth $16.62 billion in the previous month, while exports were at $15.98 billion. Inflation is expected to rise 0.4 percent on month and 4.3 percent on year after adding 0.07 percent on month and 4.45 percent on year in May. Core CPI was up 0.40 percent on month and 5.32 percent on year in the previous month.
by RTT Staff Writer
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