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IDX Composite surges past 7,200 on positive market sentiment
The IDX Composite closed at 7,219.67 with a 0.44 percent gain on Wednesday, driven by positive market sentiment.
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An employee takes a photo of a screen displaying stock movements on July 4, 2023, at the Indonesian Stock Exchange (IDX) in Jakarta on Tuesday. The IDX Composite closed at 7,219.67 with a 0.44 percent gain on Dec. 20, 2023, driven by positive market sentiment. (Antara/Hafidz Mubarak A)
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he Indonesia Stock Exchange (IDX) Composite (IHSG) continued yesterday’s rally, surpassing 7,200 and gaining 31.82 points, or 0.44 percent, throughout the day’s trading to close at 7,219.67.
The bullish momentum extended to eight sectoral indices. The raw goods sector led the rally with a 2.69 percent increase, followed by the transportation and logistics sector, surging by 1.88 percent.
In addition, the infrastructure sector saw a 0.92 percent advance, while the energy and technology sectors climbed by 0.38 percent and 0.35 percent, respectively. The property and real estate sector and non-primary consumer goods sector saw gains of 0.33 percent and 0.26 percent, respectively. The financial sector closed with a modest 0.12 percent gain.
Amid the rally, three sectors experienced corrections. The primary consumer goods sector decreased by 0.42 percent, the industrial sector dipped by 0.30 percent and the health sector weakened by 0.09 percent.
The total volume of stock transactions on the exchange reached 21.59 billion shares with a transaction value of Rp 14.38 trillion (US$925.86 million). Among the listed stocks, 260 gained, 254 corrected and 251 remained stagnant.
The recent bullish trend was significantly influenced by various global sentiments, including the United States central bank’s recent dovish signal following its latest policymaker meeting. According to Federal Reserve Bank of Richmond president Thomas Barkin, the Fed would consider interest rate cuts if disinflationary trends persisted, contingent upon further evidence of inflation moving toward the 2 percent target.
This projection led to an extension of Wall Street's rally on Tuesday, with the energy and communication services sectors leading in percentage gains. Reacting to dovish policy signals, traders also unwound bets on higher US short-term yields.
Investors in the swap market also raised expectations of a 25-basis point Federal Funds Rate cut at the Federal Open Market Committee (FOMC) later in March next year, with the probability surging to nearly 70 percent. A Bank of America Corp. survey on Tuesday revealed that expectations of a Fed rate cut tend to make investors optimistic since early 2022.
Meanwhile, in the Asian region, the Bank of Japan aligned with market expectations by maintaining an “ultra-loose” monetary policy, citing the need to monitor price and wage trends before considering any adjustment to the current benchmark interest rate of -0.1 percent.
The negative rate, according to Phillip Sekuritas Indonesia's research team, aims to stimulate increased lending by banks to businesses and consumers.
