Jakarta Composite Index down on external factor

Jakarta Composite Index down on external factor

Illustration. Movement of the Composite Stock Price Index (IHSG) on the Indonesia Stock Exchange, Jakarta, (ANTARA PHOTO/Sigid Kurniawan)

Jakarta (ANTARA News) - The Jakarta Composite Index (IHSG) opened lower on Thursday on worse relations between the United States and China, analysts said.

The index of the Indonesian Stock Exchange (BEI) fell 18.49 points or 0.32 percent to 5,850.12 points and the index of the 45 most liquid stocks dropped 0.50 percent to 924.04 points.

Chief researcher of Valbury Sekuritas Alfiansyah said relations between the two world`s largest economies continue to worsen driving global stock markets to the negative territory.

"In addition to trade dispute, the conflicts between the two economic giants has widened to security aspect in the South China Sea," Alfiansyah said.

Publication of third quarter financial reports of listed companies, which are expected to notch up improved performance, would help prevent the IHSG from sinking deeper, he said.

In addition, positive sentiment is also expected from budget deficit, which is expected to be smaller than 2 percent of the Gross Domestic Product (GDP) . The deficit is estimated to be around 1.83-2.04 percent.

"Smaller budget deficit would contribute to reducing the debt repayment burden and would strengthen rupiah that would have positive impact on the market," he said.

Other regional markets such as Nikkei, Hang Seng and Strait Times also recorded a decline in index in the opening trade.

Reporting by Zubi Mahrofi
Editing by Andi Abdussalam