The Indonesian stock market has closed higher now in back-to-back sessions, surging more than 60 points or 1.5 percent in the process. The Jakarta Composite Index finished just below the 4,000-point plateau, and now traders are expected to lock in gains when the market opens on Friday.
The global forecast for the Asian markets suggests consolidation on renewed concerns over the economy and the debt limit in the United States. Technology stocks are expected to see continued pressure, along with steel companies and airlines. The European and U.S. markets finished firmly in the red, and the Asian markets are expected to follow that lead.
The JCI finished modestly higher on Thursday, supported by gains from the retail stocks and financial shares.
For the day, the index collected 16.80 points or 0.4 percent to finish at 3,997.64 after trading between 3,975.87 and 3,997.95. Volume was 5.98 billion shares worth 4 trillion rupiah. There were 127 gainers and 84 decliners.
Among the gainers, Matahari Putra Prima surged 7.5 percent, while Unilever Indonesia added 0.7 percent, Mayora Indah climbed 3.2 percent and Bank Central Asia collected 0.6 percent.
The lead from Wall Street is fairly negative as stocks moved mostly lower on Thursday after failing to sustain an early upward move. The downturn came amid uncertainty about raising the debt limit as well as a fresh round of testimony from Federal Reserve Chairman Ben Bernanke.
While comments from Bernanke contributed to the markets' strength on Wednesday, the Fed Chief sought to clarify his remarks in testimony before Senate Banking Committee. Bernanke reiterated that the Fed is willing to deploy additional stimulus if conditions warrant, but he suggested that the central bank is not likely to take action in any time in the near future.
"The situation is more complex," Bernanke said. "Inflation is higher...We are uncertain about the near-term developments in the economy...We are not prepared at this point to take further action."
Traders also continued to express uncertainty about whether Democrats and Republicans can reach an agreement on raising the debt limit in order to avoid a default by the U.S. government. Amid the concerns about the debt limit debate, Moody's has placed its "AAA" debt rating on the U.S. under review for a possible downgrade.
The early strength came as traders reacted positively to a slew of economic data released before the start of trading, including reports showing an unexpected uptick in retail sales and a drop in weekly jobless claims to a nearly three-month low.
On the corporate news front, J.P. Morgan (JPM) rose by 1.8 percent after reporting second quarter earnings of $1.27 per share, higher than $1.09 per share in the year-ago quarter. Net revenues rose 7 percent to $26.78 billion. Analysts estimated earnings of $1.21 per share on revenues of $25.13 billion.
The major averages remained stuck firmly in negative territory going into the close of trading. The Dow fell 54.49 points or 0.4 percent to 12,437.12, the NASDAQ dropped 34.25 points or 1.2 percent to 2,762.67 and the S&P 500 slid 8.85 points or 0.7 percent to 1,308.87.
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