Yesterday's rising indices on Wall Street, high expectations of companies' financial reports and positive statements regarding economic growth in China resulted in a good day at the Indonesia Stock Exchange (IDX). Indonesia's main stock index, the IHSG, rose 1.88 percent to 4,767.16 on Tuesday (23/07), even though technical indicators seemed to predict a weakening of the index. Also the continued fall of the Indonesian rupiah did not turn investors away from the market. In fact, foreign investors were net buyers of Indonesian stocks.
The Indonesian rupiah weakened after Indonesia's central bank made steps to loosen the rate of rupiah in offshore markets. Moreover, it is confirmed by an official of Bank Indonesia that the bank is letting the rupiah weaken gradually. Market participants noted that the weakening Euro will minimize the risk for foreign investors to buy Indonesian bonds.| Source: Bank Indonesia
Asian indices were mostly up after China's prime minister Le Keqiang said that China's economic growth will not fall below 7 percent. Weak existing home sales in the US also brought positive sentiments as the market started speculating that this weak data will imply a continuation of the Federal Reserve's quantitative easing program.