Indonesia's Jakarta Composite Index Curbed by Slowing GDP Growth
The benchmark Indonesia stock index (IHSG or Jakarta Composite Index) moved sideways on Monday's trading day (05/05) influenced by Indonesia's disappointing GDP growth result in the first quarter of 2014 in combination with mixed Asian stock indices. At the start of the day, the index was up as investors believed that the Q1-2014 GDP growth result would be in line with expectations. However, after Statistics Indonesia announced the growth rate, the IHSG fell, although stayed in the green zone.
Only continued foreign net buying and the appreciating Indonesian rupiah exchange rate managed to provide some support for the IHSG. The index strengthened 0.08 percent to 4,842.50 points.
Statistics Indonesia announced today that Indonesia's gross domestic product (GDP) grew 5.21 percent year-on-year (yoy) in the first quarter of 2014, much lower than the forecasts (around 5.65 percent).
Stocks in Asia were negatively affected by China’s manufacturing that contracted for a fourth month in April 2014. The HSBC manufacturing PMI of China fell short of its already weak preliminary result, triggering concerns among investors that the slowdown in the world’s second largest economy is structural. Pessimism about China’s manufacturing also offset positive news that was conveyed in the message that US employers added more jobs than expected in April 2014, pushing the unemployment rate to the lowest level in six years.
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