JCI seen little changed this week

JCI seen little changed this week

Agence France-Presse Jakarta

Jakarta share prices are likely to drift in a narrow range with few investors willing to take fresh positions ahead of the Independence Day holiday and with concerns over oil prices continuing to weigh on sentiment, dealers said

For the week ended Aug. 13, the Jakarta Stock Exchange composite index up 0.26 percent at 755.920.

Average daily turnover for the week was Rp 546.9 billion (US$59 million) compared with Rp 600.2 billion a week earlier.

"We cannot expect too much positive movement of the index," Arianto Reksoprodjo, a senior analyst with Trimegah Securities, said noting that many investors would prefer to stay on the sidelines ahead of Tuesday's Independence Day holiday and against a backdrop of high oil prices and renewed rupiah weakness.

Elsewhere in Tokyo, Japanese share prices are expected to rebound this week, recovering from sharp sell-offs sparked by record high oil prices and weaker-than-expected growth data, dealers said.

They said Friday's selling in the wake of the June quarter gross domestic product (GDP) data appeared to be overdone.

For the week ended Aug. 13 the Tokyo Stock Exchange's benchmark Nikkei-225 index fell 215.37 points, or 1.96 percent, to close at 10,757.20, its lowest finish since May 18. The broader TOPIX index of all first section shares fell 10.31 points or 0.93 percent to 1,096.81.

"Investors overreacted to the poor GDP findings. The June GDP data alone do not mean Japan's economic recovery has hit a snag and I expect investors to buy back shares next week," said Shinichiro Kobayashi, senior market analyst at UFJ Institute, adding the Nikkei index could rebound to around the 11,000-points level.

However surging oil prices and worries about their impact on global demand including the technology sector would cap any rebound said Mitsuhiro Nakano, senior market strategist at Daiwa Research Institute,.

"High oil prices are a big negative factor because it could really slow down the Japanese economy," Nakano said.

Meanwhile in Hong Kong, shares are expected to trade higher next week on expectations of strong corporate results from some leading companies, dealers said.

Big blue-chip firms, including Cheung Kong, China Mobile and Hutchison, will report their interim results next week.

However the upside will be capped by weakness on Wall Street and ongoing concerns about record high oil prices, dealers said.

Investors are also skittish over rising oil prices which have hurt Wall Street and most regional markets in recent days.

The key Hang Seng Index lost 118.85 points, or 0.95 percent, over the past week to close Friday at 12,359.83.

"The sentiment in the Hong Kong market isn't bad but high oil prices have dampened investors' confidence," said DBS Vickers director Peter Lai said.

"Given the expected strong performance from corporate results, investors are cautiously optimistic for the market outlook next week," he said.

Investors will also be closely watching the release of key U.S. data in the coming week for for further clues on the health of the American economy.