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IDX Composite rises 1.08%, fueled by positive ECB forecasts
The IDX Composite’s 1.08 percent gain reflected the market’s upbeat reaction to the ECB’s hints at future interest rate reductions.
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A woman walks on March 14, 2024, past a large screen displaying stock indices at the Indonesia Stock Exchange (IDX) in Jakarta. The IDX Composite gained 1.08 percent on May 28, 2024. (AFP/Bay Ismoyo)
T
he Indonesian Stock Exchange (IDX) Composite index concluded Tuesday’s trading session on a high note, rising 1.08 percent or 77.20 points, to close at 7,253.62.
This marked a reversal from the index’s performance earlier in the week when it opened in the red zone.
Trading activity saw 19.38 billion shares exchanged with a total transaction value of Rp 13.12 trillion (US$815.4 million), with 287 stocks advancing, 240 declining and 253 unchanged.
Seven out of eleven sectors in the index contributed to the upward trend. The basic materials sector led the gains with a 3.64 percent increase, followed by the energy sector at 1.67 percent and the infrastructure sector at 1.38 percent.
The industrial sector experienced the steepest decline, dropping by 0.87 percent, along with the non-primary consumer goods sector, which fell by 0.59 percent.
Looking at individual stock performance within the LQ45 index, PT Barito Pacific (BRPT) topped the gainers with an 8.33 percent jump. PT Merdeka Battery Materials (MBMA) and PT Merdeka Copper Gold (MDKA) followed suit with 8.06 percent and 7.41 percent, respectively.
PT Adaro Energy Indonesia (ADRO) witnessed the largest drop within the LQ45 index, with a 6.27 percent decrease in share price. Shares of PT Bukalapak.com (BUKA) and PT Kalbe Farma (KLBF) saw the next largest declines, decreasing by 3.57 percent and 0.96 percent, respectively.
Market analysts from Pilarmas Investindo Sekuritas pinpointed a blend of positive domestic and international sentiments as the catalyst for the IDX Composite's robust performance.
Globally, Asian markets displayed resilience, buoyed by hints from European Central Bank (ECB) officials regarding a potential interest rate cut. This has fueled speculation and positive market reactions.
"This [statement from ECB officials] indicates a potential easing in the bank’s monetary policy," Pilarmas wrote Tuesday, as quoted by Investor.id.
Domestically, a report by the Finance Ministry indicating a surplus in the State Budget up to April 2024 also bolstered market confidence. The ministry announced a surplus of Rp 75.7 trillion, or 0.33 percent of gross domestic product (GDP).
This surplus is expected to serve as a significant buffer, aiding in crisis management, economic recovery and structural reforms. Despite external challenges, these positive economic indicators are seen as stabilizing factors for ongoing efforts toward a sustainable economic recovery.
