Jakarta Composite Index: Euphoria on the Indonesian Stock Market
Investors' appetite for mining and plantation stocks managed to support the benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) on Thursday's trading day (22/05). After the recent decline of the IHSG, market participants continued to accumulate stocks that are considered cheap. Furthermore, indices on Wall Street on Wednesday were up and impacted positively on Asian indices on Thursday, thereby providing positive market sentiments for the IHSG.
Despite the rupiah still depreciating against the US dollar, foreign investors were back to record a net buy. The Jakarta Composite Index climbed 1.21 percent to the level of 4,969.88 points on Thursday (22/05).
Asian indices were also up due to the release of China's preliminary HSBC manufacturing PMI which indicated an improvement in May 2014 although still below 50 (and thus contracting). Furthermore, the higher markit manufacturing PMI of Japan as well as higher foreign bond investment contributed to the positive atmoshpere on Asian markets. Investors were also content to see the yen depreciate again.
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