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IDX Composite closes lower ahead of US Fed rate decision
Inflation, global sentiment and the Fed's stance have impacted the rupiah market and the IDX Composite.
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An employee takes a picture of stock movements
at the Indonesian Stock Exchange (IDX) in Jakarta on July 4, 2023.
(Antara/Hafidz Mubarak A)
T
he Indonesia Stock Exchange (IDX) Composite closed lower on Wednesday ahead of an interest rate policy announcement by the United States Federal Reserve.
The index fell by 1.63 percent to 6,642.418.
The IDX Composite recorded a trading value of approximately Rp 12 trillion (US$752.3 million) throughout the day, involving 25 billion shares changing hands 1.4 million times. Of the stocks listed on the index, 135 rose, 450 fell and 165 remained effectively constant.
The top gainers were Telefast Indonesia (TFAS), which jumped 24.7 percent, followed by Telkom Indonesia (TLKM) which rallied by 3.7 percent and Merdeka Copper Gold (MDKA) which rose 3.14 percent.
The day’s losers were led by Suber Global Energy (SGER) which was down 15.8 percent, Indah Kiat Pulp and Paper (INKP) which fell 14.32 percent and Erajaya Swasembada (ERAA) which weakened 14 percent.
The health sector had the biggest sectoral decline of the day on the IDX Composite, with a correction of 4.12 percent.
In September, the Fed decided to keep interest rates at 5.25 to 5.50 percent. However, the US central bank signaled the possibility of another rate hike in the year.
According to the FedWatch Tool, 97.1 percent of market participants expect the Fed to maintain its current interest rate. This projection is slightly lower than the previous figure of 98.4 percent.
The US economy grew at 4.9 percent year-on-year (yoy) in the third quarter of 2023, the highest since the fourth quarter of 2022, or nearly two years. Data from S&P Global Manufacturing PMI Flash indicates that US business activity increased to an expansionary level of 50 in October 2023, up from 49.8 in September.
The latest data shows that the US economy is still advancing briskly, making it challenging for inflation to ease. Hence, the market is expecting the Fed to maintain its hawkish stance.
