Indonesia's Main Stock Index (IHSG) Continues its Volatile Performance
Indonesia's main stock index (IHSG) was mixed on Tuesday's trading day (04/06) as negative market sentiments were still felt after yesterday's tumble (inflicted by Indonesia's April trade deficit). Foreigners continued to sell parts of their Indonesian stock portfolios causing the index to fall below the psychological boundary of 5,000 points, which also meant that it went into oversold territory. But the rise of the Yen, thus supporting Asian indices, in combination with positive openings in Europe made the IHSG rise in the end.
Indonesia's main indicator rose 1.01 percent to 5,021.61 points.
The IDR rupiah rebounded due to the rise of the Yuan after the People's Bank of China (PBOC) announced to strengthen the reference rate of its currency, instead of intentionally weaken it in order to make it more competitive towards other currencies. Moreover, the statement of the Head of the Federal Reserve in Atlanta, Dennis Lockhart, who said that the Fed is still committed to provide stimulus, brought a wave of fresh air for other currencies, including the rupiah.
| Source: Bank IndonesiaAsian stock indices were mixed with the Nikkei rising the most after its yen fell. Banking and consumer stocks led the increase. Moreover, Japan's government wants its pension funds to lift allocations to domestic stocks, while taking a more active approach to investment. Lastly, Australia's interest rate was left untouched, which was well received by investors.
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