Asian Economic News
Slide May Continue For Jakarta Shares
10/26/2009 9:43 PM ET
(RTTNews) -
The Indonesian stock market turned back to the downside again on Monday - albeit barely - one session after ending the three-day losing streak that had cost it nearly 90 points or 3.5 percent in the process. The Jakarta Composite Index remained just shy of the 2,470-point plateau, and now analysts are suggesting that the market will continue to trend lower at the opening of trade on Tuesday.
The global forecast for the Asian markets is firmly negative, with weakness expected from the commodities following a noteworthy decline in prices. Gold miners could be hit especially hard, while financials and properties also are likely to decline. The European and U.S. markets finished solidly in the red, and the Asian bourses are also expected to track to the downside.
The JCI finished flat on Monday as weakness among the financials and commodities wiped out gains from other sectors.
For the day, the index eased 0.24 points or 0.01 percent to finish at 2,467.71 after trading between 2,456.42 and 2,475.91.
Among the decliners, Bank Rakyat shed 1.3 percent, while Indofood Sukses Makmur lost 3.1 percent, Goodyear Indonesia was down 1.2 percent, Bakrie & Brothers shed 5 percent, Bumi Resources fell 1 percent and Telekomunikasi Indonesia declined 1.7 percent.
Finishing higher, Astra International climbed 1.4 percent and Tambang Batubara Bukit Asam added 3.7 percent.
Wall Street offers a sharply pessimistic lead as stocks saw steep losses on Monday, giving up early gains amid a considerable pullback in the financial and commodity sectors. The major averages all closed firmly in negative territory, backing further away from one-year highs set earlier this month. The early strength in the markets came as traders reacted positively to the latest batch of earnings news, including better than expected earnings from Verizon (VZ) and Corning (GLW).
Trader sentiment was also boosted by optimism about the third quarter GDP report due to be released later this week. Economists estimate that the economy expanded by 3.2 percent after contracting in each of the four previous quarters.
Nonetheless, weakness among financial stocks limited the upside for the markets, and a sharp pullback by commodities prices contributed to a substantial downturn by the major averages in late morning trading.
The weakness in the financial sector came following some negative analyst comments, with Fifth Third Bancorp (FITB) and SunTrust (STI) posting notable losses after Rochdale Securities analyst Dick Bove recommended selling the stocks.
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