A cut in stimulus will certainly have its impact on the financial market in developing economies."
Jakarta (ANTARA News) - The decision of the House of Representatives on subsidized oil fuel price hike has served a positive sentiment raising Indonesia`s benchmark stock index on Tuesday.

The Jakarta composite index closed 65.95 points or 1.38 percent higher at 4,840.45 points after the plenary session of the House of Representatives approved the revised 2013 state budget on Monday night.

The approval means that it is only a matter of time before the government announced the increase in the prices of subsidized oil fuel, analysts said.

"The index closed 1.38 percent stronger today after the House of Representatives gave it approval last night, therefore, the increase in the prices of subsidized oil fuels will be announced any time soon," Panin Sekuritas` analyst Purwoko Sartono said here on Tuesday.

The decision on the state budget included revisions of a number of economic targets and cash aid for the poor.

The government has said it will raise the prices of subsidized oil fuels if the House approved its proposal for cash aid as compensation for the poor.

The sooner the announcement is made the better will be its effects on the domestic financial market. Purwoko added.

Meanwhile, investors are also awaiting the decision made in the session of The Fed on the possibility of a cut in stimulus in its third quantitative ease to be announced on June 19.

"The investors take the position of wait and see concerning the result of the session. A cut in stimulus will certainly have its impact on the financial market in developing economies," Purwoko said.

He predicted that the Jakarta index will fluctuate but tends to strengthen around 4,810 to 3,900 points in Wednesday trading.

There were 183,017 transactions at the Indonesian Stock Exchange on Tuesday with 4.779 billion shares changing hands valued at Rp6.336 trillion .

Gainers outnumbered decliners by 204 to 89 .

Regional market such as Hang Seng recorded index almost flat at 21,225.88 points, Nikkei-225 reported a 0.20 percent fall in index to 13,007.28 points and Straits Times reported a 1.47 percent gain to 3,230.38 points.
(Uu.H-ASG/A014)

Editor: Priyambodo RH
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