The Fed's decision to keep its interest rate unchanged has encouraged foreign investors to make a comeback to Indonesia.Jakarta (ANTARA) - The Fed's decision to hold the federal funds rate steady has had a positive impact on the Jakarta composite share price index (IHSG) that opened higher on Thursday morning.
The index at the Indonesia Stock Exchange (BEI) increased 0.11 percent to reach 6,346.01 during the morning trade.
Valbury Sekuritas chief researcher Alfiansyah remarked on Thursday that the Fed's decision had helped strengthen the IHSG and encouraged capital inflow into Indonesia.
"The Fed's decision to leave its interest rates unchanged has encouraged foreign investors to make a comeback to Indonesia," he explained.
Moreover, efforts to allay tensions over the US-China trade war through a scheduled meeting between US President Donald Trump and Chinese President Xi Jinping during the Group of Twenty (G20) Summit in Osaka, Japan, later this month has bolstered market agents' seasonal optimism, he pointed out.
"Although the (planned) Xi-Trump meeting has shored up optimism on the de-escalation of trade war tensions, it is too premature to conclude that they will reach an agreement," he cautioned.
Regional markets that strengthened on Thursday morning comprised Nikkei rising 130.23 points, or 0.61 percent, to 21,464.1; Hang Seng surging 239.7 points, or 0.85 percent, to 28,441.84; while the Straits Times Index climbed 23.05 points, or 0.7 percent, to 3,311.22.
The Fed has decided to keep the benchmark rate in the target range of 2.25 to 2.5 percent though hinting at a likelihood of policy loosening happening this year.