Rally May Stall For Indonesia Stock Market

The Indonesia stock market has tracked higher in five straight sessions, gathering more than 120 points or 1.8 percent along the way. The Jakarta Composite Index now sits just beneath the 6,950-point plateau although it may run out of steam on Thursday.

The global forecast for the Asian markets is murky as investors digest Wednesday’s FOMC rate decision. The European markets were down and the U.S. bourses were mixed and little changed and the Asian markets figure to follow the latter lead.

The JCI finished modestly higher on Wednesday as gains from the financials and resource stocks were capped by weakness from the cement companies.

For the day, the index gained 30.57 points or 0.44 percent to finish at 6,948.28.

Among the actives, Bank CIMB Niaga and Bank Danamon Indonesia both shed 0.62 percent, while Bank Mandiri collected 0.45 percent, Bank Negara Indonesia sank 0.83 percent, Bank Central Asia rallied 2.19 percent, Bank Rakyat Indonesia gained 0.44 percent, Indosat Ooredoo Hutchison gained 0.58 percent, Indocement retreated 1.20 percent, Semen Indonesia plunged 2.50 percent, United Tractors soared 3.94 percent, Astra International strengthened 1.54 percent, Energi Mega Persada dropped 0.85 percent, Aneka Tambang added 0.51 percent, Vale Indonesia improved 0.75 percent, Timah climbed 1.08 percent, Bumi Resources spiked 2.92 percent and Astra Agro Lestari and Indofood Suskes were unchanged.

The lead from Wall Street offers little guidance as the major averages opened lower on Wednesday but recovered enough to finish mixed and little changed.

The Dow gained 82.05 points or 0.23 percent to finish at 35,520.12, while the NASDAQ fell 17.27 points or 0.12 percent to close at 14,127.28 and the S&P 500 dipped 0.71 points or 0.02 percent to end at 4,566.75.

The late-day action came after the Fed announced its widely expected decision to resume raising interest following a pause last month, raising the target range for the federal funds rate by 25 basis points from 5.25 to 5.50 percent. With the increase, the midpoint of the target range is the highest since early 2001.

The decision to increase rates came as the Fed noted inflation remains elevated, while U.S. economic activity has been expanding at a moderate pace and job gains have been robust in recent months.

In his post-meeting press conference Fed Chair Jerome Powell said it is possible the central bank could raise rates again in September or hold steady, noting the central bank plans to take a meeting by meeting approach.

Crude oil prices fell Wednesday, weighed down by data showing a smaller than expected drop in U.S. crude inventories last week. West Texas Intermediate Crude oil futures for September fell $0.85 or 1.1 percent at $78.78 a barrel.