The situation was similar to one ahead of last week`s meeting of the US Federal Reserve that failed to bring about a concrete result.
Jakarta (ANTARA News) - The Indonesian shares gained with the share price index rising 0.20 percent to 4,083.66 points when the Indonesian Stock Exchange opened trade on Thursday morning.

Chief Researcher of MNC Securities Edwin Sebayang, said here the situation was similar to one ahead of last week`s meeting of the US Federal Reserve that failed to bring about a concrete result.

He said tension that hit the US and European stock markets ahead of a meeting planned by the European Central Bank had its effect on the Indonesian market.

"The same seems to happen in Europe that the meeting would end with result far short of expectation," he said.

The Indonesian market, therefore, will likely suffer more setback, he added.

Meanwhile, the Indonesian currency rupiah weakened against the US dollar on concern about protracted global economic slowdown.

Rupiah traded at the level of 9,580 in inter-bank transaction on Thursday morning losing 10 basis points from 9,570 earlier.

"Rupiah tends to lose more value against dollar on lingering global economic slowdown," Reza Priyambada, the chief researcher of PT Indosurya Asset Management.

The fear is worsened by reported fall not as expected of the Australian Gross Domestic Product in the first half of the year, Reza said.

Negative sentiment also came from weak performance of the European service and retail sectors, he added.

Intervention planned by the ECB in bond market may come with strict requirements that could dampen the effects of attempt to shore up ailing economies like Spain and Italy, he said.

"Market players are awaiting intervention by ECB but euro also is under pressure by Germany which said the problem faced by the euro zone would not end as soon as expected ," he said.

Meanwhile, money market observe Johanes Ginting of Monex Investindo Futures , said expectation of market players that ECB would launch a new program to buy bonds to protect the euro zone from worse crisis would give positive sentiments for rupiah.

However, ECB had opted to remain cautious in unveiling the bond purchasing target considering rejection from the German central bank, Johanes said.(*)

Editor: Heru Purwanto
Copyright © ANTARA 2012