"Almost all Asian markets recorded a decline on negative sentiment as The Fed is almost certain to cut its financial stimulus," analyst Alfred Nainggolan said.
Jakarta (ANTARA News) - The Jakarta composite index fell again closing at 255.14 points lower on Monday on expectation the US central bank would cut its financial stimulus.

The index of the Indonesian Stock Exchange (BEI) fell 5.58 percent to 4,313.52 points with index of 45 most liquid stock down 6.69 percent to 708.09 points.

"Almost all Asian markets recorded a decline on negative sentiment as The Fed is almost certain to cut its financial stimulus," PT Buana Capital`s analyst Alfred Nainggolan said here on Monday.

Alfred said the negative sentiment prompted foreign investors on the domestic market to release their shares.

Foreign net sales were valued at Rp1.783 trillion in the first trading day of the week, he said.

"There is no significant sentiment in sight to push up the share prices on the domestic market in the coming days," he said.

Currently the market was given the country`s macro economic data with inflation expected to be high in August.

Rupiah weakening also contributed to the fall of the BEI index, that the BEI will likely be hit by slump deeper than other markets in this region.

He said the country did succeed in cutting its balance of payment deficit in the second quarter compared with the previous quarter but the decline was more on the issuance of a state bond in dollar denomination.

The country`s balance of payment deficit dropped to US$2.5 billion in the second quarter from US$6.6 billion in the first three months of the year.

There were 154,326 transactions in share trading on Monday with 3.945 billion shares worth Rp5.972 trillion changing hands.

Gainers were outnumbered by decliners by 20 to 308 with 44 other unchanged.

Regional markets such as Hang Seng fell in index by 0.24 percent to 22,463.70 points with Nikkei-225 index rising 0.79 percent to 13,758.13 points and that of Straits Times down 0.76 percent to 3,173.33 points.

Meanwhile, the national currency lost more value on Monday closing at 10,540 per US dollar from 10,380 earlier on speculation about the Fed`s final plan on financial stimulus.

In the domestic market, deficit in the balance of payments, though declining, gave a negative sentiment to the financial market.

Market observers predicted Bank Indonesia would again step in to protect rupiah to keep the value of the currency in line with the country`s economic fundamentals.

Currently external sentiment is stronger than domestic sentiment.

Bank Indonesia has maintained its benchmark interest rate at 6.5 percent in a bid to keep rupiah stable, they said. (*)

Editor: Heru Purwanto
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