Steady Start Eyed For Indonesia Stock Market

The Indonesia stock market headed south again on Monday, one session after ending the two-day losing streak in which it had slipped more than 25 points or 0.4 percent. The Jakarta Composite Index now rests just beneath the 6,790-point plateau although it may find traction on Tuesday.

The global forecast for the Asian markets suggests mild upside with earnings optimism offset by interest rate jitters. The European markets were mixed and flat and the U.S. bourses were slightly higher and the Asian markets figure to split the difference.

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

For the day, the index sank 30.99 points or 0.45 percent to finish at 6,787.58.

Among the actives, Bank CIMB Niaga improved 0.38 percent, while Bank Mandiri tumbled 1.91 percent, Bank Danamon Indonesia tanked 2.14 percent, Bank Negara Indonesia was up 0.53 percent, Bank Central Asia collected 0.28 percent, Bank Rakyat Indonesia dropped 1.67 percent, Indosat Ooredoo Hutchison gained 0.76 percent, Indocement increased 0.49 percent, Semen Indonesia retreated 1.22 percent, Indofood Suskes gathered 0.40 percent, United Tractors advanced 0.91 percent, Astra International rose 0.40 percent, Energi Mega Persada jumped 1.69 percent, Aneka Tambang added 0.47 percent, Vale Indonesia slumped 1.90 percent, Timah picked up 0.50 percent and Bumi Resources and Astra Agro Lestari were unchanged.

The lead from Wall Street ends up positive as the major averages opened higher on Monday, slipped into the red midday but bounced back into positive territory heading into the close.

The Dow climbed 100.71 points or 0.30 percent to finish at 33,987.18, while the NASDAQ added 34.26 points or 0.28 percent to close at 12,157.72 and the S&P 500 rose 13.68 points or 0.33 percent to end at 4,151.32.

Uncertainty about the outlook for interest rates seemed to spook investors after Federal Reserve Bank of Richmond President Thomas Barkin said that he wants to see more evidence of inflation settling back to target before calling interest rate hikes finished.

But he added that he feels reassured by what he is seeing in the banking sector in terms of stability after a couple of solvency issues by individual banks last month.

In economic news, the National Association of Home Builders said the NAHB/Wells Fargo Housing Market Index in the U.S. increased to 45 in April, rising for a fourth month in a row.

Crude oil prices drifted lower on Monday amid concerns about the outlook for energy demand, while uncertainty about interest rate hikes and the dollar’s rise against other currencies also weighed. West Texas Intermediate crude oil futures for May sank $1.69 or 2.1 percent at $80.83 a 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 (5.75 percent), deposit facility rate (5.00 percent) and lending facility rate (6.50 percent).