Indonesia Stock Market Update: Down on Profit Taking after Positive Start
Similar to when the market expects the release of positive companies' corporate earnings reports, the benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) gained significantly at the start of today's trading day (19/05) as the market waited for the official declarations of the presidential and vice-presidential candidates that will participate in the presidential election that is scheduled for 9 July 2014. The two pairs that will compete are the Joko Widodo-Jusuf Kalla pair and the Prabowo Subianto-Hatta Rajasa pair.
Immediately after the announcement that Joko Widodo chose Jusuf Kalla as his running mate, the IHSG and rupiah exchange rate plunged, losing the gains it had acquired earlier on the day. This should not be seen as a negative response of the market towards the candidates but is purely a case of profit taking due to a lack of further positive market sentiments. In fact, mixed Asian indices caused negative market sentiments on the Indonesia Stock Exchange. And thus - after having surged +1 percent directly after the start of trading - at the end of the day the IHSG had fallen 0.33 percent to 5,015.00 points.
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