Lower Open Predicted For Indonesia Stock Market

The Indonesia stock market turned lower again on Wednesday, one session after snapping the two-day losing streak in which it had fallen more than 25 points or 0.4 percent. The Jakarta Composite Index now sits just beneath the 6,080-point plateau and it’s expected to open under pressure again on Thursday.

The global forecast for the Asian markets suggests consolidation in reaction to the FOMC’s monetary policy announcement. The European markets were mixed and the U.S. bourses were down and the Asian markets are tipped to follow the latter lead.

The JCI finished slightly lower on Wednesday following losses from the financial shares and resource stocks.

For the day, the index lost 10.47 points or 0.17 percent to finish at 6,078.57 after trading between 6,049.58 and 6,114.10.

Among the actives, Bank Danamon Indonesia dropped 0.89 percent, while Bank CIMB Niaga shed 0.53 percent, Bank Negara Indonesia plummeted 2.71 percent, Bank Central Asia skidded 1.31 percent, Bank Mandiri lost 0.79 percent, Bank Rakyat Indonesia cratered 5.20 percent, Indosat tanked 3.33 percent, Indocement added 0.45 percent, Indofood Suskes gained 0.40 percent, United Tractors rallied 2.72 percent, Astra Agro Lestari climbed 1.20 percent, Aneka Tambang retreated 1.69 percent, Vale Indonesia plunged 3.34 percent, Timah tumbled 1.30 percent and Bumi Resources, Semen Indonesia and Astra International were unchanged.

The lead from Wall Street is negative as stocks opened mixed and flat on Wednesday, but they all headed firmly lower into the close.

The Dow sank 265.66 points or 0.77 percent to finish at 34,033.67, while the NASDAQ shed 33.17 points or 0.24 percent to end at 14,039.68 and the S&P 500 fell 22.89 points or 0.54 percent to close at 4,223.70.

The weakness on Wall Street came as the Fed’s latest economic projections now point to an increase in interest rates in 2023.

The latest projections from Fed officials suggest interest rates will be increased to 0.6 percent in 2023 compared to previous projections indicating rates would remain at near-zero levels. Seven officials expect a rate hike as soon as 2022.

As expected, the Fed also maintained its target range for the federal funds rate at zero to 0.25 percent, where it has remained since last March. The Fed said it expects rates to remain at near-zero levels until labor market conditions reach maximum employment and inflation is on track to moderately exceed 2 percent for some time.

Crude oil futures failed to hold early gains and settled roughly flat on Wednesday, despite data showing a larger than expected drop in crude inventories last week. West Texas Intermediate Crude oil futures for July ended up by $0.03 at $72.15 a barrel after peaking earlier at $72.99.

Closer to home, the central bank in Indonesia will conclude its monetary policy meeting today and announce its decision on interest rates; the bank is widely expected to leave its benchmark lending rate unchanged at 3.50 percent.