"The BEI index closed higher again on optimism that the US government and the Congress would reach a compromise to raise the borrowing limit," analyst Purwoko Sartono said.
Jakarta (ANTARA News) - The Jakarta Composite Share Price Index extended gain on Thursday on market optimism the United States would reach an agreement to increase its debt ceiling.

The index of the Indonesian Stock Exchange (BEI) closed 29.24 points or 0.66 percent higher at 4,486.68 points with index of 45 most liquid stocks up 0.87 percent to 755.19 points.

"The BEI index closed higher again on optimism that the US government and the Congress would reach a compromise to raise the borrowing limit," Panin Sekuritas` analyst Purwoko Sartono said here on Thursday.

A new strong candidate Janet Yellen to replace Bernanke at the helm of The Fed is also seen by the market as positive as she is known to be in favor of maintaining monetary stimulus.

"The market in developing countries would have additional time to to prepare in facing stimulus tapering," he said.

However, he warned that ahead of long Idul Adha holiday share transactions on the domestic market tends to decline.

He predicted the BEI index would fluctuate at the levels of 4,425--4,510 point on Friday .

Friday`s trading on the BEI recorded 155,306 transactions with 3.903 billion shares worth Rp4.937 trillion changing hands.

Gainers outpaced decliners by 170 to 107 with 93 shares remaining flat .

Regional markets such as Hang Seng recorded a 0.36 percent fall in index to 22,951.30 points with Nikkei-225 index up 1.12 percent to 14,194.71 points and that of Straits Times gaining 0.48 percent to 3,169.91 points.

Meanwhile, rupiah was again under pressure losing more value against the US dollar to close at 11,500 per dollar on Thursday from the previous level of 11,213 per dollar.

The announcement by the International Monetary Fund revising down its global economic growth target to 2.9 percent gave a negative sentiment to the domestic financial market.

"The IMF target for the global economic growth was revised down from 3.6 percent and it weighed on the currencies of developing nations including rupiah," Ruly Nova, a financial market observer from Bank Himpunan Saudara, said.

The impact of the revision in Indonesia is fear of a fall in exports that would have adverse effect on the country`;s balance of payments, Ruly said.

However, the correction of the rupiah value against the US dollar is still well under control, he said. (*)

Editor: Heru Purwanto
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