Indonesia Stock Market Tipped To Open In The Red

The Indonesia stock market has finished lower in three straight sessions, shedding almost 100 points or 1.6 percent along the way. The Jakarta Composite Index now rests just above the 6,590-point plateau and it’s looking at another soft start again on Thursday.

The global forecast for the Asian markets suggests further consolidation as rising bond yields continue to hammer technology stocks – although support from crude oil may limit the downside. The European markets were up and the U.S. markets were down and the Asian markets figure to follow the latter lead.

The JCI finished modestly lower on Wednesday following mixed losses from the cement stocks and performances from the financial shares and resource companies.

For the day, the index lost 22.08 points or 0.33 percent to finish at 6,591.98 after trading between 6,575.38 and 6,615.45.

Among the actives, Bank Danamon Indonesia dropped 0.85 percent, while Bank CIMB Niaga shed 0.52 percent, Bank Negara Indonesia collected 0.35 percent, Bank Mandiri plunged 3.10 percent, Bank Rakyat Indonesia surrendered 1.43 percent, Indosat retreated 1.69 percent, Indocement tumbled 1.84 percent, Semen Indonesia sank 0.74 percent, United Tractors declined 1.69 percent, Astra International dropped 0.88 percent, Energi Mega Persada surged 4.04 percent, Astra Agro Lestari rose 0.26 percent, Aneka Tambang plummeted 3.09 percent, Vale Indonesia soared 3.60 percent, Timah lost 0.73 percent, Bumi Resources skyrocketed 6.67 percent and Indofood Suskes, Bakrie Sumatera Plantations and Bank Central Asia were unchanged.

The lead from Wall Street is broadly negative as the major averages were unable to hold on to early gains on Wednesday, bouncing back and forth across the unchanged line before finishing in the red for the second straight session.

For the day, the Dow tumbled 339.82 points or 0.96 percent to finish at 35,028.65, while the NASDAQ dropped 166.64 points or 1.15 percent to close at 14,340.25 and the S&P 500 sank 44.35 points or 0.97 percent to end at 4.532.76.

The late slide on Wall Street came amid rising Treasury yields and worries over inflation and looming interest rate hikes after U.S. Treasury yields hit fresh two-year highs amid Fed rate hike expectations.

Most analysts believe a rate hike of at least 25 basis points from the FOMC is imminent, although some are now starting to think it may be a 50 bp boost.

In economic news, the Commerce Department said that U.S. homebuilding increased to a nine-month high in December amid a surge in multi-family housing projects.

Crude oil prices continued their recent upward surge on Wednesday, rising for the fifth straight day to a fresh seven-year high following supply issues in the Middle East. West Texas Intermediate for February contract jumped $1.22 or 1.43 percent to $86.65 per barrel.

Closer to home, the central bank in Indonesia will wrap up its monetary policy meeting later today and then announce its decision on interest rates. The bank is expected to keep unchanged its benchmark lending rate at 3.5 percent, its deposit facility rate at 2.75 percent and its lending rate at 4.25 percent.