After continuously reaching new record-high levels last week, the Indonesia Stock Exchange (IHSG) finally had to give up some of its gain and closed 1.04 percent lower. Declining Asian stock markets (excluding Japan's main index) and fears that the IHSG had already reached a (too) high level impacted on today's result. Market participants, who recently confirmed good corporate annual results of many companies by buying, now engaged in profit taking.
During today's trading day, the IHSG reached its highest level (4,825.70) at the start of session one, and its lowest level (4,744.48) at the start of session two. At the end, it stood at 4,761.46, an 1.04 decline. Trade volume and total value of transactions lowered, with foreign investors mostly buying and domestic investors mostly selling their Indonesian assets.
The IDR rupiah continued its negative run after responding to president Obama's submission to the Senate's plan for US $85 billion in automatic budget cuts (sequester). Apart from that, both China's government and HSBC reported lower manufacture data from China. Domestically, Indonesia's negative trade balance and increased inflation in February worried investors and resulted in a weakening rupiah.
Asian stock markets declined in line with China's plan for a stricter policy regarding mortgages in its property sector, a policy which is aimed at averting a bubble in the housing sector. This triggered fears that China's housing sector will weaken in the near future. The aforementioned lower manufacture data increased negative sentiments. The Nikkei, however, increased due to the election of Kuroda as governor of the Bank of Japan. He stated to support the government's policy of faster stimulus to boost Japan's economy.
When writing this column, European stock markets continued to weaken after feeling the effects of lower Asian stock markets, a fall in U.K. Construction PMI, and a deterioration in the Eurozone Sentix Investor Confidence.
Top Movers – Monday 4 March 2013
|• Mahaka Media
|• Nusantara Inti Corpora
|• Centris Multipersada Pratama||13.14%|
|• Prima Alloy Steel Universal||12.73%|
|• Lamicitra Nusantara
|• Bank OCBC NISP
|• Summarecon Agung