T

he Jakarta Composite Index (JCI), the benchmark of the Indonesian Stock Exchange (IDX), rallied on Friday along with indices around the world following the surge in crude oil prices.

The JCI climbed about 0.8 percent to 4,451 at the opening of Friday trading from its previous close of 4,414, according to IDX data. The index touched a low of 4,421 in the afternoon, before rebounding and closing the day at 4,456, up 0.97 percent from Thursday.

Basic industry, mining and infrastructure, utilities and transportation booked the highest jumps as they moved up by 2.84 percent, 2.52 percent and 2.03 percent, respectively. Meanwhile, shares of lender Bank BRI, telecommunication company PT Telekomunikasi Indonesia and gas company PT Perusahaan Gas Negara, all state-owned companies, led in terms of trading volume.

Earlier, KDB Daewoo Indonesia Securities analyst Dang Maulida wrote in a research note that the firm expected the JCI to trade higher on Friday following the sharp hike in the West Texas Intermediate (WTI) crude price and a statement by European Central Bank (ECB) president Mario Draghi that it would be necessary to review the bank'€™s monetary policy stance in March amid a deteriorating economic outlook and turmoil in global markets.

'€œThis statement fuelled hopes for more quantitative easing, which eventually triggered a rally in world oil prices,'€ she wrote.

Brent crude rose 6.3 percent to US$31.10 a barrel on the ICE Futures Europe exchange, before trading at $30.83. Prices headed for an 11 percent two-day advance, the biggest since the end of August. In New York, WTI crude climbed 4.6 percent to $30.89, Bloomberg reported.

Global bourses were rallying on Friday. Japan'€™s Nikkei 225 index jumped 5.88 percent, followed by Hong Kong'€™s Hang Seng and South Korea'€™s KOSPI, which close up by 2.9 percent and 2.11 percent, respectively, data from the IDX showed.

Separately, LBP Enterprise'€™s Lucky Bayu Purnomo voiced a similar view.

'€œThe surging oil price caused the JCI rally,'€ he said over the phone on Friday.

However, he pointed out that local and global markets remained in an abnormal situation.

'€œOil offers quite a good opportunity, as its price is low, while at the same time the Chinese economy is slowing down,'€ he said, adding that such conditions put investors in doubt as to whether the strengthening oil price trend would last.

Lucky projected that the JCI would move in a narrow corridor between 4,450 and 4,500 next week, saying the country'€™s strong fundamentals would help weather negative sentiment in global markets.

Heldy Arifien, an analyst with KDB Daewoo Securities Indonesia, predicted the index would breach the 4,450 support level and continue its move to 4,520 next week.

'€œSome stocks like CPIN [Charoen Pokphand Indonesia], JPFA [Japfa Comfeed Indonesia], INDF [Indofood Sukses Makmur] and PGAS [Perusahaan Gas Negara] are expected to influence the Indonesian benchmark index on Monday'€™s trading session,'€ he wrote.