The Indonesia stock market has moved lower now in three straight sessions, retreating more than 90 points or 2.3 percent along the way. The Jakarta Composite Index settled just above the 3,985-point plateau, and now analysts are forecasting a flat lead at the opening of trade on Tuesday.
The global forecast for the Asian markets remains cautious thanks to ongoing concerns over the debt problems in Europe. Spain's 10-year benchmark yield rose to above 7 percent, a level seen unsustainable. Similarly, Italy's 10-year bond yield climbed to 6.13 percent, although the pressure was more on the shorter-dated paper. Providing some support, Alcoa, Inc., said Monday after the markets closed that its quarterly sales beat forecast. The European and U.S. markets finished lower, and the Asian bourses are tipped to follow that lead.
The JCI finished sharply lower on Monday following losses from the resource stocks and energy producers.
For the day, the index plunged 70.14 points or 1.73 percent to finish at 3,985.05 after trading between 3,976.36 and 4,038.39.
Among the decliners, Vale Indonesia shed 4.5 percent, while Aneka Tambang fell 3.6 percent, Medco Energi Internasional lost 3.8 percent, Energi Mega Persada plunged 4.1 percent and Astra International gave away 2.9 percent.
The lead from Wall Street remains soft as stocks saw moderate weakness on Monday but ended well off their worst levels of the day. Lingering economic concerns weighed on the markets, although selling pressure remained relatively subdued.
The weakness came as traders expressed continued concerns about the economic outlook following last week's disappointing jobs report. The report showed much weaker than expected job growth in the month of June, although the economy still added jobs for the twenty-first consecutive month.
Uncertainty about the situation in Europe also generated some selling pressure, as euro zone finance ministers hold another meeting in Brussels. Ahead of the meeting, Spanish ten-year bond yields climbed above the key 7 percent level, adding to concerns about the high cost of borrowing.
Nonetheless, trading activity was somewhat subdued ahead of the release of aluminum giant Alcoa's (AA) second quarter results after the close of trading. Shares of Alcoa rose 0.5 percent ahead of the news.
After the bell, Alcoa said that it swung to a small second quarter net loss, hurt by continued slump in aluminum prices and a slew of charges. The company's quarterly earnings per share, excluding items, came in line with analysts' expectations, but its quarterly sales beat analysts' forecast.
The release of results from Alcoa is seen as the unofficial start of the earnings season, as the company is typically the first Dow component to release its results.
A relatively quiet day on the U.S. economic front also kept some traders on the sidelines, although the Federal Reserve reported a bigger than expected increase in consumer credit. Consumer credit surged $17.1 billion in May following an upwardly revised increase of $10 billion in April. Economists had expected an increase of $8.5 billion.
The major averages moved to the upside going into close, finishing the day well off their lows for the session. The Dow slipped 36.18 points or 0.3 percent to finish at 12,736.29, while the NASDAQ edged down 5.56 points or 0.2 percent to end at 2,931.77 and the S&P 500 dipped 2.22 points or 0.2 percent to 1,352.46.
by RTT Staff Writer
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