After being in green territory for almost the entire trading day, Indonesia's benchmark Jakarta Composite Index suddenly plunged into deep red in the last 1.5 hours of trading on Friday (29/07). HM Sampoerna, one of the largest companies on the Indonesia Stock Exchange in terms of market capitalization, shocked analysts by plunging 9.70 percent. Another huge company, Unilever Indonesia also put severe pressure on the Jakarta Composite Index by plunging 5.75 percent on Friday.
With the notable exception of Japan, all major stock markets in Asia fell as the Bank of Japan announced a disappointing stimulus package, only 'modestly' expanding purchases of exchange-traded funds from local financial institutions in a bid to inject more capital into the economy of Japan. Although the central bank announced to double these purchases, it is perceived "modest" by investors and analysts who all expected to see a much bigger boost. The announcement came after the concluding of the Bank of Japan's July policy meeting on Friday (29/07).
Meanwhile, the Bank of Japan also decided to maintain its negative interest rates at -0.1 percent, while keeping its base money target at 80 trillion yen (approx. USD $775 billion) and the pace of purchases for other assets including government bonds.
Japan's Nikkei 225 Index climbed 0.56 percent. However, China's Shanghai Composite Index fell 0.50 percent, Hong Kong's Hang Seng Index declined 1.28 percent, South Korea's Kospi Index fell 0.24 percent, while Singapore's Straits Times Index plunged 1.71 percent on Friday (29/07).
Falling oil prices - touching fresh three-month lows - caused more negative sentiments in Asia. Investors see slowing global economic growth worsening the global supply glut. International Brent crude oil futures fell USD $0.28 to USD $42.42 per barrel, while US West Texas Intermediate crude declined USD $0.27 to USD $40.87 a barrel. Both these crude benchmarks have fallen approximately 20 percent since their peaks in June 2016.
Indonesia's Jakarta Composite Index fell 1.57 percent to 5,215.99 points. It is interesting to note that this decline occurred despite foreign investors recording a net buy of IDR 1.58 trillion (approx. USD $120 million). This shows that fierce international criticism on the four executions that happened in the early hours of Friday did not undermine foreign investors' appetite for Indonesian assets.
Meanwhile, the Indonesian rupiah depreciated 0.11 percent to IDR 13,112 per US dollar based on the Bloomberg Dollar Index. However, Bank Indonesia's benchmark rupiah rate (the Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 0.14 percent to IDR 13,094 per US dollar on Friday (29/07).
Indonesian Rupiah versus US Dollar (JISDOR):| Source: Bank Indonesia