The market players expected the meeting of the central bank leaders would end with an announcement that BI benchmark interest rate (BI Rate) was raised to soften the pressure on rupiah later on the day, analyst Benedictus Agung said.
Jakarta (ANTARA News) - Indonesia`s benchmark stock index gained in the opening trade on Thursday ahead of a meeting of the board of governors of Bank Indonesia (BI).

The index of the Indonesian Stock Exchange (BEI) opened 0.37 percent higher at 4,041.49 points with the index of 45 most liquid stocks up 0.57 percent to 668.80 points.

Samuel Sekuritas` analyst Benedictus Agung said the market players expected the meeting of the central bank leaders would end with an announcement that BI benchmark interest rate (BI Rate) was raised to soften the pressure on rupiah later on the day .

An increase in the BI rate from the current level of 6.5 percent, would raise the rupiah value against the US dollar, serving a positive sentiment for the share market, Benedictus said.

Panin Sekuritas` analyst Purwoko Sartono said the BEI index was able to lift itself from the negative area after hitting the rock bottom of lower than 3,900 points.

"The policy of the OJK (financial Service Authority) allowing buyback by issuers and plan by BI to hold emergency meeting today seemed to have given a relaxed mood in the market," Purwoko said.

Meanwhile, the BEI index would remain in a high volatility with no fundamental change to direct the market movement, he added.

"Investors would still choose to wait and see what BI and the government would do to deal with the crisis ," he said.

He predicted the BEI index would hover around 3,900--4,100 points in Thursday`s trading.

Regional markets such as Hang Seng recorded a 0.49 percent increase in index to 21,629.81 points with Nikkei-225 index up 0.64 percent to 13,423.61 points and that of Straits Times gaining 0.67 percent to 3,024.40 points .

Meanwhile, the rupiah value remained unchanged against the US dollar in the Thursday`s opening trade .

The currency opened at 11,260 per US dollar ahead of the meeting of the board of governors of BI.

"The meeting on Thursday is unusual . The market reacted positively to the meeting," Samuel Sekuritas` economist Lana Soelistianingsih said.

Market players expected BI would raise the BI rate and the facility of one week overnight rate given to commercial banks (FASBI).

"The increase is expected to cut the rupiah liquidity and strengthen its exchange rate," Lana said.

Short term requirement is reducing the pressure on rupiah , she added.

Trust Securities` chief researcher Reza Priyambada said worries about escalation of conflict in Surya is a negative factor for the market prompting investors to put their money in a safe haven.

Rupiah value is also determined by the weakening of other Asian currencies mainly India`s rupee which has dragged down other regional currencies. (*)

Editor: Heru Purwanto
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