Trade war sentiment forecast to sting stock price index

Trade war sentiment forecast to sting stock price index

Jakarta (ANTARA) - The sentiment arising from the trade dispute between the United States and China is forecast to hang heavy over the composite stock price index (CSPI) of the Indonesia Stock Exchange (ISE) on Tuesday.   

The CSPI opened up 15.61 points, or 0.25 percent, to 6,271.96, while the index of the 45 leading stocks, or LQ45, inched up 3.93 points, or 0.4 percent, to 989.64.

Alfiansyah, the research head at Valbury Securities in Jakarta, remarked that anxiety among global market players will persist over US President Donald Trump's statement on trade negotiations with China that might have the reverse effect for the United States.

"The world stock index will continue to bog down under pressure owing to this sentiment. Factors affecting the global market can undoubtedly restrict the JCI's positive movement into territorial trading today," Alfiansyah pointed out.

Trump stepped up pressure on China to reach a trade agreement within a stipulated time period by giving the ultimatum of hiking tariffs on goods from China worth US$200 billion this week to US$325 billion at a rate of 25 percent if it failed to comply.

On the other hand, China has reacted by deliberating on deferring the travel of its key trade negotiators to Washington this week after Trump's threat.

"Trump's threat might boomerang, as China might not prefer entering any negotiation process under pressure," Alfiansyah stated.  

China's monetary authority will cut the reserve requirement ratios for small- and medium-sized banks, effective from May 15, 2019, to salvage firms struggling in the face of an economic slowdown.

The People's Bank of China (PBoC) will issue some 280 billion yuan, or US$41.23 billion, in long-term funding to be channeled for loans to small and private firms.

In the meantime, regional bourses including the Nikkei index, plummeted 190.77 points, or 0.86 percent, to 22,067.96; the Hang Seng index increased 222.97 points, or 0.76 percent, to 29,432.79; and the Straits Times index soared 10.5 points, or 0.32 percent, to reach 3,301.12.

EDITED BY INE

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