Indonesia Stock Exchange Falls 0.60 Percent Amid Mixed Asian Stock Markets
The rise of the Indonesia Stock Exchange (IHSG) at the start of today's session was not sustained. It disappointed market participants who were hoping that Indonesia's main index would continue its upward movement supported by strengthening American and European stock indices after it became known that Cyprus will stay in the Euro-zone and the Federal Reserve will continue its bond-buying program.
The lower German Manufacturing PMI and the problems in the Euro-zone ended the two-day rally of the IHSG. Moreover, Asian stock markets were mixed with a negative trend and were followed by European markets that opened lower. It all impacted on the IHSG that fell 0.60 percent to 4,802.67. Trade volume and total value of transactions increased. Foreign investors mostly sold Indonesian assets, while domestic market participants mostly bought.
The IDR rupiah is still under pressure as market participants are worried about the rejection of the parliament of Cyprus regarding (conditions of) the bailout. President Nicos Anastasiades will meet with various political party leaders to discuss an emergency structure with Russia. Banks in Cyprus will stay closed until at least next week Tuesday to avert a run on banks.
Asian stock markets were mixed but with a weakening trend despite the news that the US Federal Reserve will maintain its bond-buying program, and the result of the Chinese HSBC Manufacturing PMI that rose to 51.7 from a previous 50.4. The Nikkei stayed positive as the governor of the Bank of Japan (BoJ) declared its stimulus program. The Korea Stock Exchange (KOSPI) declined as there was news about a cyber attack that might disturb the computer network, together with increased fears about a possible war with North Korea.
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