The US economic growth was not strong enough to prompt investors to sell their dollar to prop up the majority of the global currencies including rupiah, an analyst said.
Jakarta (ANTARA News) - The Jakarta composite share price index closed higher on Thursday on report that the Fed would continue its monetary stimulus program.

The index of the Indonesian Stock Exchange (BEI) rose 65.48 points or 1.52 percent to 4,367.37 points with index of 45 most liquid stocks up 1.93 percent to 728.90 points.

BEI President Director Ito Warsito said here on Thursday Janet Yellen, the deputy President of the Fed said the US economy still needs stimulus to help push up the stock market to a positive area.

"The pressures in the past several days were temporary. There were two sentiments putting pressure on the Indonesian market. They were issues over the US stimulus and BI rate (Bank Indonesia benchmark interest rate). However, now the sentiments are favorable." Ito said.

Sinarmas Sekuritas analyst Christandi Rheza Mihardja predicted that the BEI index would move around 4,333--4,392 points on Friday.

"Trade on Friday would be determined by US trade balance, which is expected to decline with deficit widening to US$39.1 billion and jobless claims expected to reach 330,000," Christandi said

He said the European data yet to be published are expected to show a decline of 0.44 percent in GDP growth on-year.

In Thursdays trading at BEI there were 140,588 transactions involving 4.45 billion shares valued at Rp4.75 trillion changing hands with gainers outnumbering decliners by 198 to 73 shares.

Regional market such as Hang Seng recorded a 0.82 percent gain in index to 22,649.15 points with Nikkei-225 index climbing 2.12 percent to 14,876.41 points and that of Straits Times up 0.74 percent to 3,189.09 points.

Meanwhile, the Indonesian currency rupiah regained part of its losses against the US dollar on Thursday on the statement by the US central bank leader.

Rupiah gained 59 points in interbank transactions to close at the level of 11,546 per US dollar from the level of 11,605 on Wednesday afternoon.

Rully Arya Wisnubroto, financial market analyst from Bank Mandiri, Janet said that the US economic growth was not strong enough to prompt investors to sell their dollar to prop up the majority of the global currencies including rupiah.

"Global impact is more dominant that domestic impact, and the statement by Janet that US economic growth was not strong enough, gave rise to expectation that the Fed would continue its monetary stimulus program," Rully said.

He said continuation of the Feds stimulus program, would strengthen the inflows of foreign capital to Indonesia and prop up rupiah.

He said domestic sentiment alone is not strong enough to draw foreign capital to Indonesia.

Positive sentiment in the domestic market was partly brought about by a slight cut in the countrys current account deficit to US$8.4 billion or 3.8 percent of the countrys GDP from US$9.9 billion or 4.4 percent of GDP in the second quarter, he said.

He predicted that rupiah would regain more of its losses to move around 11,250--11,500 per dollar by the weekend. (*)

Editor: Heru Purwanto
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