T

he bullish sentiment on the Indonesian stock market continued on Monday, pushing up the main price index to another record high despite the decline in price gauges in other Asian markets.

The Jakarta Composite Index (JCI) gained 0.24 percent to a record close of 4,032.97 as investors became more confident the improvement in its economic fundamentals would enable Indonesia to acquire investment grade status from major international agencies this year.

“Optimism over the prospect of receiving the investment grade rating was an extraordinary factor that was not enjoyed by other bourses in the region in today’s trading,” Nico Omer Jonckheere, vice president of research and analysis at Valbury Asia Futures, told The Jakarta Post.

Singapore’s Straits Times index fell 0.17 percent, Hong Kong’s Hang Seng slid 0.32 percent and Shanghai’s composite index lost 0.2 percent.

Indonesia is poised for an investment grade sovereign credit rating after top international agencies Moody’s Investors Service, Standard & Poor’s and Fitch Ratings upgraded the country’s rating earlier this year for a review of a possible upgrade.

On the contrary, the US, the world’s number one economy, may lose its prized triple-A rating after the same rating agencies put the country on review for potential downgrade over approaching-the-limit US debt by Aug. 2. US policy makers are intensifying talks on increasing the debt ceiling to avoid credit default.

“Foreign investors keep pumping in funds. They shop stocks massively every day. They are positioning for investment grade,” Nico added. Foreign investors, who owned 59 percent of stocks held by the public, bought Rp 1.87 trillion worth of stocks but sold Rp 1.56 trillion of them, leaving a net foreign buy of Rp 308 billion on Monday.

Trading transactions were “moderate”, the IDX said in a report released after the close of trading, with 3.78 billion shares worth Rp 4.25 trillion changing hands during the day.

The JCI index, Asia’s second best performer so far this year, has increased 8.9 percent, the stock exchange’s data shows. This year foreigners bought more than Rp 19 trillion net in shares, more than double last year’s achievement.

“Both domestic indicators and external factors bolster JCI growth,” Andry Asmoro, a Jakarta-based economist at Bank CIMB Niaga, told the Post. He was referring to the recent announcement by Bank Indonesia (BI) that Indonesia’s economic growth could top 6.8 percent this year, beating previous forecasts of 6.4 to 6.6 percent.

The central bank has also forecast the country’s headline inflation down to about 5 percent this year from 6.96 percent in 2010. “Those indicators have made foreign investors comfortable with Indonesia,” Andry said.

Shares of Astra International, the nation’s largest automotive distributor and the bourse’s biggest firm by market capitalization, led Monday’s gain at the Jakarta bourse.

Despite surging capital inflow, the rupiah weakened on Monday, trading at Rp 8,555 against the US dollar versus Rp 8,537 the day before.