Weaker US Consumer Confidence Supports Asian Indices Including IHSG
Wall Street and European indices being up at the end of last week had a positive impact on Asian stock indices on Monday (28/10), despite experiencing a correction during today's trading day. The Jakarta Composite Index (IHSG), Indonesia's benchmark stock index, joined this trend. After making a strong start, it became susceptible to profit taking and thus had a mixed performance although it ended at 4,590.54 points, a 0.21 percent increase. The IHSG was supported by foreign net buying and an appreciating rupiah exchange rate.
The Indonesian rupiah, in line with a number of other Asian currencies, appreciated against the US dollar on Monday (29/10). The latter weakened after the release of the US Consumer Confidence Index, which fell compared to the previous period and thus triggered speculation that the Federal Reserve will continue its quantitative easing program for a while. But there were also some data that supported the performance of the US dollar. These included increased US Durable Goods Orders and higher US Wholesale Inventories.
Asian stock indices were mixed, but generally up. Lower consumer confidence in the USA supported Asian indices as lower consumer confidence may form an extra reason for the Fed to maintain its QE3 program. Moreover, corporate earnings reports of the third quarter are mostly in line with investors' expectation. Of the 108 companies within the MSCI Asia Pacific Index, only 57 reported earnings below expectation.
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