Immediately after the opening of trade on Wednesday (10/06), Indonesian stocks rebounded sharply. Yesterday, Indonesia’s benchmark stock index (Jakarta Composite Index) had fallen 2.30 percent due to worries about looming higher US interest rates later this year, the Greek debt crisis in the Eurozone, heavy rupiah depreciation, and weak domestic macroeconomic data (such as Indonesia’s high inflation, disappointing Q1-2015 economic growth, the still wide current account deficit, and the central bank’s falling forex reserves).

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Indonesian stocks declined more than expected during the first trading session on Tuesday (09/06). The benchmark Jakarta Composite Index plunged 3.12 percent to 4,858.31 points amid heightened expectation of a US interest rate hike as well as worries about the Greek debt situation in the Eurozone. The performance of other Asian stock indices was mixed on Tuesday morning with Shanghai, Singapore and South Korea showing modest gains, while New Zealand, Hong Kong, Malaysia and Taiwan were down marginally.

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Indonesian stocks and the rupiah are experiencing severe pressures at the start of the new trading week. Indonesia’s benchmark stock index (Jakarta Composite Index) declined 1.68 percent to 5,014.99 points (a seven-month low), while the rupiah depreciated 0.71 percent to IDR 13,385 per US dollar according to the Bloomberg Dollar Index on Monday (08/06). As such, the rupiah extended its record-low closing in the post Asian Financial Crisis era. Indonesian stocks and the rupiah are the worst performing Asian assets.

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Most Asian stock markets are down on Wednesday (27/05), including Indonesia’s benchmark stock index (IHSG). The IHSG was down 0.95 percent to 5,270.22 points by 14:32 pm local Jakarta time. The poor performance of stocks across Asia today followed yesterday’s falling US stock markets. The Dow Jones, S&P 500 and Nasdaq all declined about 1 percent on US dollar strength after the release of several strong US economic data (supporting a US interest rate hike before the year-end) and heightened concerns about the debt crisis in Greece.

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Indonesian stocks and the rupiah improved on the last trading day of the week supported by moderately rising indices on Wall Street on Thursday (07/05), which was in stark contrast to heavy selling that occurred one day earlier after Federal Reserve Chair Janet Yellen’s statement that US stock prices may be overvalued. Meanwhile, weak trade data from China could a reason for policymakers to provide more stimulus. Indonesia’s benchmark stock index climbed 0.62 percent to 5,182.21 points on Friday (08/05).

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After having plummeted about 7 percent over the course of seven trading days, Indonesia’s benchmark Jakarta Composite Index rebounded directly after opening on Monday (04/05). At 10:41 am local Jakarta time, the index had surged 1.30 percent to 5,152.95 points. As Indonesian stocks are generally ‘oversold’ they have become attractive to investors. Moreover, most US and European stock indices ended higher at the end of last week hence providing more fuel for Indonesian stocks to rebound today.

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Indonesian stocks continued to fall today (30/04). After the first trading session, Indonesia’s benchmark Jakarta Composite Index fell 0.11 percent to 5,099.83 points. The index was negatively affected by yesterday’s weakening stock indices in the USA and Europe. These indices experienced a correction due to mixed signals stemming from the latest US Federal Reserve’s FOMC meeting. Contrary to its March policy statement, the Fed did not rule out hiking rates at the next meeting. However, it also downgraded the US growth outlook.

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The benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) is again plagued by selling pressures on Wednesday’s trading day (29/04). After today’s first trading session the index was down 2.58 percent to 5,106.73 points. The decline is caused by the persistence of the negative sentiments that have been felt over the past couple of days (explained below) coupled with a discrepancy in economic growth forecasts between the Indonesian government and the country’s central bank (Bank Indonesia).

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Most Southeast Asian stock markets declined ahead of the two-day policy meeting of the US Federal Reserve which started today (28/04). Indonesia’s benchmark Jakarta Composite Index (IHSG) managed to limit losses. After the 3.49 percent fall yesterday, the IHSG was down 1 percent after the first trading session today. However, near the closure of the market the index improved markedly resulting in a small loss of 0.06 percent only. Due to severe losses over the past couple of trading sessions, some oversold blue chip shares became attractive.

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Indonesian stocks continue to fall on today’s trading day (28/04). After having declined 3.49 percent yesterday, the benchmark Jakarta Composite Index fell a further 1.00 percent during the first trading session on Tuesday. Investors, particularly foreign ones, are still concerned about weak first quarter financial results of listed Indonesian companies, signalling that the country’s economic growth in Q1-2015 will be disappointing too. Furthermore, the market is waiting for results of the Federal Reserve’s two-day policy meeting which is set to start today.

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Despite technical indicators suggesting further upward movement of Indonesia's benchmark stock index (known as the Jakarta Composite Index or IHSG), a positive performance of the index was blocked by external factors. Several Asian stock indices were down responding to Markit's lower US manufacturing PMI (slipping to 55.5 from 57.1 in February 2014). Similarly, China and the Eurozone's manufacturing data showed slowing growth. Continued appreciation of the rupiah exchange rate managed to limit the decline of the IHSG.

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At the start of the new week, Indonesia's benchmark stock index (Jakarta Composite Index or IHSG) was able to continue to climb, supported by positive Asian indices. Today, investors took advantage of discounted stocks in Asia as markets had fallen after the Federal Reserve's announcement last week that the quantitative easing program would be wound down further as well as a possible US interest rate hike in 2015 and 2016. However, the IHSG was also vulnerable to profit taking. Therefore, today's gain was limited.

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The US Federal Reserve's plan to increase interest rates is a serious threat to the stock and bonds markets of emerging markets, including Indonesia, in 2014. The higher Fed Fund rate will result in a high cost bonds-climate in Indonesia. The Federal Reserve announced on Wednesday (19/03) that it continues to cut its quantitative easing program (QE3) by USD $10 billion in March 2014 as well as aims for an interest rate hike six months after the 'tapering' has ended. With the current pace, QE3 is expected to end in December 2014.

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We expected that Indonesia's Jakarta Composite Index (the country's benchmark stock index also known as IHSG) would continue to weaken on Wednesday's trading day (19/03) but net buying by foreign investors managed to push the index back into green territory. During the first two days of this week, the IHSG fell as euphoria over Joko Widodo's announcement to run for president in the 2014 elections faded. Last week, the market showed that they approve of Widodo as the IHSG climbed 3.23 percent on Friday (14/03).

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Previously we were hoping that if global stock indices would turn positive, it could limit the fall of Indonesia's benchmark stock index (Jakarta Composite Index or IHSG) as the 'Jokowi effect' has definately worn off. On Tuesday (18/03), investors continued to engage in profit taking causing the IHSG to plunge 1.45 percent to 4,805.61 points. While most Asian indices were up, influenced by rising indices on Wall Street and in Europe on the previous trading day (17/03), the IHSG deviated sharply from the Asian trend today.

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There were two options with regard to today's trading day (Monday 17 March 2014). First, the Jakarta Composite Index (Indonesia's benchmark stock index also known as IHSG) could rise further after its impressive 3.23 percent jump last Friday (14/03), and secondly, the bullish market could become vulnerable to profit taking as the 'Jokowi effect' tones down and no other factors could trigger positive market sentiments. It turned out to be the second option. Not even sharp rupiah appreciation could push the index in the green zone.

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After months of uncertainty and speculation, Governor of Jakarta Joko Widodo (popularly known as Jokowi) has finally declared to run for the Indonesian presidency in the presidential election scheduled for 9 July 2014. Jokowi is backed by the Indonesian Democratic Party of Struggle (PDI-P), one of the largest political parties in Indonesia, led by chairwoman Megawati Sukarnoputri. On Friday (14/03), Megawati released a statement in which she announced to fully support Jokowi in the upcoming elections.

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Despite technical indicators pointing toward a potential rise of Indonesia's benchmark stock index (known as the Jakarta Composite Index or IHSG), foreign net selling on Wednesday's trading day (12/03) caused the 0.42 percent decline to 4,684.38 points. Only two sectors recorded a positive performance today: consumer goods and property. Companies that did particularly well were Danayasa Arthatama, Metropolitan Land, Agung Podomoro Land, Siantar Top, and Kedawung Setia Industrial.

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Although we advise investors to remain careful as any negative sentiment will be used as a valid reason for profit taking, Indonesia's benchmark stock index (Jakarta Composite Index or IHSG) was up from the start of the trading day on Tuesday (11/03). The start of dividend payouts helped to offset concerns about possible interest rate hikes (in emerging markets) as well as the impact of weak indices on Wall Street and Europe on Monday (10/03). Asian stock indices, however, were positive on Tuesday, thus providing support for the IHSG.

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At the start of the week, Indonesia's benchmark stock index (the Jakarta Composite Index of IHSG) has the tendency to decline as market participants are eager to engage in profit taking. The release of China’s weak export data (resulting in a trade deficit) at the end of last week in combination with the widening current account deficit of Japan (and its slowing GDP growth) provided enough reasons for investors to opt for profit taking. Moreover, Asian stock markets were in the red and were thus unable to support the IHSG.

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