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Stronger rupiah, JCI to start Wednesday trading
(Courtesy of tempo
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JCI: (Courtesy of tempo.co) (Courtesy of tempo.co)
(Courtesy of tempo.co)
The rupiah exchange rate appreciated Rp 14,180 per US dollar on Wednesday morning, followed by the Jakarta Composite Index (JCI), which rose by 0.7 percent (30 points) to 4,475.43. Investors are becoming optimistic that the US Federal Reserve (Fed) would keep its Fed fund rate flat this year, leading them to increase their portfolio in emerging markets.
Bloomberg data, as quoted by Kontan.co.id, showed that the rupiah had strengthened further to Rp 14,065 per dollar as of 08:45 am local time. On Tuesday, the rupiah closed at Rp 14,421.
PT Monex Investindo Futures senior research and analyst Albertus Christian said that the rupiah would strengthen further, as changing market expectations on the Fed rate had suppressed the US dollar against its trading counterparts' currencies.
'For a moment, the Fed rate increase is expected to be delayed until next year. Another positive catalyst comes from Bank Indonesia's (BI) deputy governors who have stated that the rupiah was already undervalued, arising market's appetite to buy the rupiah," he said.
On the other hand, Albertus added, the domestic market was optimistic after the government injected Rp 3.73 trillion (US$268.7 million) into infrastructure projects, which might improve the economy.
The Indonesia Stock Exchange recorded that 122 stocks rose, 33 stocks dropped and the remaining 56 stocks stayed flat at Wednesday's opening. Six of 10 sectoral indices gained, led by the Mining Sector Index which rose 1.66 percent, while the Miscellaneous Industrial Sector Index lagged the most by 0.62 percent.
Reliance Securities analyst Lanjar Nafi Taulat warned investors to anticipate a sudden shift, as the JCI technically got nearer to its moving average (MA) of 50. This signaled that the market might swing back in the opposite direction.
"There is a pullback [signal] in the [technical] indicator," he said.
The MSCI Asia Pacific Index showed a 0.2 percent increase to 129.23 at 09:03 (Tokyo time). South Korea's Kospi Index rose 0.4 percent, Australia S&P/ ASX 200 Index declined 0.4 percent, while New Zealand's S&P/ NZX 50 Index moved sideways. (ags/ebf)(++++)
