The Jakarta Post
The Jakarta Composite Index (JCI) was rallying up upon opening on Thursday, closing mid-day trade up 9.62 percent, despite other Asian indices recording declines during the day.
The Indonesia Stock Exchange's (IDX) main gauge skyrocketed by 5.61 percent to 4,158 at 9:03 a.m. and was showing no signs of slowing as it continued to reverse the 1.3 percent loss it experienced on Tuesday. The local stock exchange was closed Wednesday for the Nyepi (the Hindu Day of Silence).
The JCI closed mid-day trade at 4,316, a 9.62 percent from Tuesday's close.
Foreign investors helped to prop the index up during the day as they bought Rp 405.87 billion (US$25 million) worth of Indonesian shares. Many of them were buying blue-chip banking stocks like those of private lender PT Bank Central Asia (BCA) and state-owned lenders PT Bank Rakyat Indonesia (BRI) and PT Bank Mandiri.
This also resulted in BCA’s stock rallying by 17.67 percent. Pharmaceutical firms PT Kimia Farma recorded a 23.08-percent gain and PT Indofarma skyrocketed by 23.3 percent.
JCI’s jump during the day was going against most Asian indices that moved into the red. Japan’s Nikkei recorded the biggest decline of 3.76 percent, while Hong Kong’s Hang Seng index and Singapore’s Strait Times index were losing more than 1 percent of their value on the day.
IDX trading director Laksono Widodo said that the JCI’s rally was following most of global markets movement the day before.
“When our market was closed on Wednesday [for the Day of Silence], major markets worldwide recorded high increases, especially in the United States as the country agreed to give more incentives for its people. The JCI followed that pattern,” he explained in a text message.
The Dow Jones and S&P 500 index closed in the green for the second time in a row on Wednesday as the US Senate appeared to come near to voting on a $2 trillion package to support businesses and households devastated by the COVID-19 pandemic.
“What the fiscal and monetary stimulus has done is to allow the market to recover,” said Justin Hoogendoorn, head of fixed income strategy at Piper Jaffray in Chicago, as quoted by Reuters. “It’s not because the main street community is coming back. It’s the institutional crowd being able to say, ‘the world isn’t falling apart’.”
Despite still being haunted by the coronavirus pandemic that has infected more than 790 people and killed 58 in Indonesia, Indonesia Equity Analyst Association chairman Edwin Sebayang said the JCI’s gain was influenced by the increase in oil prices.
“The increase in prices on other commodities like nickel, tin, gold, coal and crude palm oil [CPO] also became a positive sentiment for the JCI today,” he said.
The index’s gain went in line with the rupiah, which strengthened by more than 1 percent to Rp 16,277 per United States dollar on Thursday as of 12:45 p.m., continuing its appreciation on Tuesday.