Stocks show weakness on Friday after steep drop in morning trade
The Jakarta Post
The Jakarta Composite Index (IDX) bounced back on Friday afternoon after a 2 percent drop in the morning session, but it still closed 0.69 percent lower at 6,210.69 points.
Friday was the first trading day after Bank Indonesia (BI) decided to keep its reference rate -- the 7-days repo rate -- at the level of 4.25 percent, despite the United States Federal Reserve increasing its interest rate benchmark, the federal funds rate, by 25 basis points.
Opening at 6,138.11, the index kept dropping and reached a low point of 6,085.21 within one hour, before ending the morning session down 1.73 percent at 6,146.19 points.
The index remained close to that level most of the afternoon, before recovering some lost ground in the last hour of trading.
BNI Sekuritas technical analysis head Andri Zakarias Siregar said most of the shock had been caused by foreign investors cashing out.
Domestic investors, meanwhile, seized the opportunity to buy, which helped shares bounce back.
"Big local fund managers started to buy stocks. They had anticipated this foreign investors’ profit-taking event and conducted buying transactions," he said. (bbn)
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