With a number of important global stock exchanges still closed due to Easter, it seemed that the Indonesia Stock Exchange (IHSG) lacked a reference point to which it could cling. It is also likely that market participants have already consumed most of the 2012 corporate company reports and are therefore not waiting for new data of listed companies. Moreover, today's announcement of the relative high inflation rate of March did not support the IHSG either.
During Monday's trading day, the IHSG reached its highest level (4,953.40) at the start of session one, and its lowest level (4,922.55) at the start of session one as well. At the end of the trading day, it stood at 4,937.58, a 0.07 percent decline. Trade volume and total value of transactions fell, with foreign investors mostly buying Indonesian stocks, while domestic investors mostly sold their assets.
The IDR rupiah went down again after the Europe's euro was traded lower than before, in line with market participants wait and see attitude ahead of the publication of Europe's unemployment rate (which is expected to have increased). Also, the Japanese yen experienced a rise after it became known that the Tankan Manufacturers Index was lower than estimated and China's Factory Output grew slower than expected. On the domestic front, the publication of Indonesia's March inflation rate impacted negatively on the rupiah. Inflation in March rose 0.63 percent, the highest March inflation rate in the last five years (although it was lower than inflation results in January and February). Year-on-year inflation now stands at 5.90 percent, while core inflation is at 4.21 percent. The main driver of Indonesia's March inflation rate was food prices.
A number of Asian stock markets was still closed on Monday, except the Nikkei index which fell due to the result of the Tankan Manufacturers Index and Japan's Business Sentiment which also fell below expectation. Moreover, Japan is still experiencing deflation and an increasing unemployment rate. Both these issues were not well received by market participants and sapped earlier positive news of China's HSBC Manufacturing PMI and South Korea's trade balance.
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