The Composite Stock Price Index (IHSG) of the Indonesia Stock Exchange (IDX) closed lower on Wednesday (17/7) followingnoon amid optimism regarding the Federal Reserve’s (The Fed) interest rate cut. IHSG closed down 0.06 points to 7,224.22.
Meanwhile, the group of 45 leading stocks or the LQ45 index rose 5.51 points or 0.61 percent to 910.06. “The Asian regional stock exchange tends to strengthen, apparently still supported by the market’s optimistic reaction to the Fed’s benchmark interest rate cut,” said the PIlarmas Investindo Sekuritas Research Team in its study at
Jakarta, Wednesday, July 17, 2024.
The market has the view that the Fed will start cutting interest rates in September this year. The market refers to the monthly United States (US) Retail Sales Advance data which fell from 0.3% to 0% which provides the view that consumer resilience is still weak in supporting the US economic growth outlook. Based on CME Fedwatch, the probability of a benchmark interest rate cut is 93.3% in September 2024.
Another catalyst came from the results of the Japan Reuters Tankan survey which showed increasing business optimism. Finally, the International Monetary Fund (IMF) in its World Economic Outlook (WEO) predicted that the global economy would experience moderate growth over the next two years.
From within the country, the International Monetary Fund (IMF) also projects Indonesia’s economic growth in 2024 to remain at 5%. The Asian Development Bank (ADB) also maintains Indonesia’s economic growth projection of 5% for 2024 or below the government’s target of 5.2%.
The Bank Indonesia (BI) Board of Governors’ Meeting (RDG) today, Wednesday (17/7), decided to maintain its benchmark interest rate at 6.25%.
Also read: IHSG Strengthens to Reach 7,250, US Interest Rates May Be Cut in September
Opening higher, the JCI remained in positive territory until the close of the first session of stock trading. In the second session, the JCI moved into the red zone until the close of stock trading.
Based on the IDX-IC Sectoral Index, five sectors strengthened, led by primary consumer goods which rose by 0.76%, followed by transportation & logistics and finance which rose by 0.57% and 0.39% respectively. Meanwhile, six sectors fell, namely health fell the deepest at minus 0.42%, followed by technology, raw materials and technology which fell by 0.32% and 0.25% respectively.
The stocks that experienced the biggest gains were IOTF, MSKY, BSBK, BABP, and ISEA. While the stocks that experienced the biggest declines were RICY, KIJA, BREN, LIVE, and NASI.
The frequency of stock trading was recorded at 1,090,940 transactions. The shares traded were 28.04 billion shares worth Rp11.68 trillion. The price of 287 shares rose, 251 shares fell, and 250 did not move.
The regional Asian stock exchanges this followingnoon included the Nikkei index, which weakened by 177.40 points or 0.43% to 41,097.69; the Hang Seng index, which strengthened by 11.42 points or 0.06% to 17,739.41; the Shanghai index, which weakened by 13.43 points or 0.45% to 2,962.86; and the Strait Times index, which strengthened by 1.66 points or 0.05% to 3,489.57. (Ant/Z-2)
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