On Friday (03/01), the benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) ended 1.61 percent down to 4,257.66 points amid a majority of global indices declining after having experienced a short (window dressing-inspired) rally at the end of the year. The IHSG, which was not affected by the window dressing phenomenon, was dragged down after experiencing a four-day rally in the last week of 2013. Positive US employment data were unable to support global indices.
Weak Chinese manufacturing data were the main reason for a sell-off of stocks despite Friday's appreciating rupiah exchange rate against the US dollar. Seeing a gap between 4,274 and 4,287, investors chose profit taking after the IHSG index hit the 4,300 level. Based on data from the National Bureau of Statistics (NBS), China's official purchasing managers' index (PMI) for the non-manufacturing sector fell to 54.6 in December 2013 from 56.0 in November 2013, indicating a slowdown in manufacturing activity growth. This led to negative market sentiments across Asian stock markets. In combination with falling indices on Wall Street and Europe on Thursday (02/01), it led to profit taking across Asia on Friday (03/01).
Actually, economic figures from Indonesia were positive. Year-end inflation was kept below 9 percent and the month of November recorded a trade surplus of USD $776.8 million. However, it did not provide a whole lot of support for the rupiah currency. The small appreciation of the rupiah on Friday was more the result of the strengthening of the Australian dollar and Japanese yen.