Although initially the benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) declined shortly after the opening on Wednesday (21/05), during the remainder of the day it went up. This is a trend which we often detect: after a sharp fall we see a rebound on the following day as investors want to take advantage of 'cheap' stocks. However, the rebound was only limited as investors prefer to wait and see for further market sentiments first. The main positive factor today were rising Asian stock indices.
Asian markets were up due to popular Chinese stocks, particularly mining and infrastructure stocks. Japan's Nikkei index, on the contrary, was down due to the appreciating yen after Japan's central bank announced it would not add more monetary stimulus to boost the economy.
Generally rising Asian stocks were seemingly the only reason why the IHSG managed to climb 0.29 percent to 4,910.29 points today (21/05). Negative market sentiments were caused by the depreciating Indonesian rupiah exchange rate and declining foreign net buying.
| Source: Bank Indonesia
The rupiah depreciated 0.16 percent to IDR 11,509 per US dollar according to the Bloomberg Dollar Index. Meanwhile, Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.58 percent to IDR 11,507 against the US dollar on Wednesday (21/05).