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Rally May Stall For Indonesia Stock Market

The Indonesia stock market has climbed higher in consecutive trading days, gathering more than 55 points or 0.9 percent along the way. The Jakarta Composite Index now rests just above the 6,275-point plateau although it may run out of steam on Thursday.

The global forecast for the Asian markets suggests volatility after the Federal Reserve trimmed its benchmark lending rate by 25 basis points. The European and U.S. markets finally ended mixed and little changed but the Asian bourses probably will at least open lower.

The JCI finished modestly higher on Wednesday following mixed performances from the financial shares and resource stocks.

For the day, the index rose 39.94 points or 0.64 percent to finish at the daily high of 6,276.63 after moving as low as 6,236.48.

Among the actives, Bank Danamon Indonesia added 0.21 percent, while Bank Mandiri soared 3.23 percent, Bank Central Asia collected 0.17 percent, Bank Negara Indonesia spiked 1.94 percent, Bank Rakyat Indonesia shed 0.24 percent, Indosat sank 0.61 percent, Indocement shed 0.36 percent, Semen Indonesia gained 0.79 percent, Indofood Suskes climbed 1.29 percent, United Tractors skidded 1.42 percent, Bumi Resources plunged 2.04 percent, Aneka Tambang accelerated 1.43 percent, Vale Indonesia surged 4.18 percent and Timah fell 0.44 percent.

The lead from Wall Street suggests a wild ride following the Federal Reserve's monetary policy announcement.

The Dow added 36.28 points or 0.13 percent to 27,147.08, while the NASDAQ fell 8.62 points or 0.11 percent to 8,177.39 and the S&P 500 rose 1.03 points or 0.03 percent to 3,006.73.

The volatility on Wall Street came after the Fed revealed its widely expected decision to cut rates by another 25 basis points, lowering the target range for the federal funds rate to 1.75 to 2 percent. The latest rate cut was again attributed to the implications of global developments for the economic outlook and muted inflation pressures.

The decision to cut rates was widely expected by economists but was not without dissent from members of the Federal Open Market Committee. The Fed's economic projections suggest that the meeting participants are also divided about the outlook for interest rates.

Fed Chairman Jerome Powell said in his post-meeting press conference that the central bank is prepared for a more "extensive sequence of rate cuts" in the face of an economic downturn but noted that is not currently expected.

Crude oil prices drifted lower on Wednesday, extending losses to a second straight session after moving surging Monday amid an escalation in geopolitical tensions after the drone attacks on Saudi Arabia's oil facilities. West Texas Intermediate Crude oil futures for October ended down $1.23 or 2.1 percent at $58.11 a barrel.

Closer to home, the central bank in Indonesia will wrap up its monetary policy meeting today and then announce its decision on interest rates; the bank is widely expected to keep its benchmark lending rate unchanged at 4.75 percent.

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