Mixed trading seen for Jakarta market this week

Mixed trading seen for Jakarta market this week

Agence France-Presse, Jakarta

Indonesian share prices are expected to trade mixed in this week in quiet business, dealers said on Friday.

"This week the market will tend to be quiet," said Suhendar Asoka, research analyst at Paramitra Alfa Securities.

"The weak rupiah and the imminent (expected) rise in U.S. interest rates have contributed to negative sentiment. It looks like the Fed will raise interest rates by 0.25 percentage points."

The U.S. Federal Reserve meets at the end of this month to decide whether to raise its key rate, with markets fully expecting a modest hike. Should rates be raised 0.50 percentage points or perhaps even left unchanged would likely spook investors who prefer certainty.

Asoka said he hoped the index would not fall below the key psychological level of 700 points.

"Foreign investors are also weighing political risks," he said. "We have seen a lot of mudslinging in the presidential campaign.

"They are adopting a wait-and-see attitude and will likely return once the (July 5) election has been held successfully."

The Jakarta Stock Exchange composite index closed on Friday at 704.125, up 6.188 points or 0.9 percent for the week.

Average daily volume was 1.02 billion shares worth Rp 605.1 billion (US$64.5 million) compared to 858.8 million shares worth Rp 775.1 billion the previous week.

In Tokyo, Japanese share prices are expected to hold steady this week as fears of a large U.S. interest rate hike weigh in the balance against recent data confirming Japan's economic rebound.

U.S. consumer price data to be released Tuesday could signal inflation heating up, warning that an expected end-of-June rate hike could be larger than previously thought, they said.

"If U.S. inflation is above two percent, I think fears of a larger interest rate hike will emerge," said Hitoshi Ichio, general manger of research at Mizuho Investors Securities.

Ichio said he expected the Tokyo Stock Exchange's benchmark Nikkei-225 index to trade between 11,200 and 11,800 in the coming week.

The Nikkei-225 index rose 398.77 points or 3.58 percent on the week to 11,526.82, while the broader TOPIX index of all First Section shares gained 35.33 points or 3.14 percent to 1,160.30.

In Hong Kong stocks are likely to mark time this week, with the market struggling to decisively gain higher ground beyond 12,400 points in the face of concerns over the outlook for oil prices and interest rates.

The benchmark Hang Seng Index gained 373.75 points over the past week, rising 3.1 percent to 12,396.39.

In Bangkok, Thai stock, under pressure from record high oil prices, are expected to continue weaker in a sluggish week, with investors looking to U.S. inflation data for a clear lead on the outlook for U.S. interest rates.

The Stock Exchange of Thailand composite index fell 13.34 points or 2.13 percent over the past week to close on Friday at 613.13.

In Singapore, share prices are likely to weaken this week, with investors continuing cautious as they await a fresh lead on the concerns of the moment -- oil and interest rates.

The Straits Times Index closed the week at 1,823.14 points, managing a gain of 31.44 points or 1.75 percent as it continued to recover from the recent losses.

In Taipei, Taiwan shares are expected to lose ground in the week ahead as market confidence remains fragile amid concerns over cross-strait tensions and an expected U.S. interest rate hike.

Last week, the weighted index rose 10.18 points or 0.2 percent to close at 5,735.07 on Friday. However, that masked a fall of 2.26 percent on Friday and 1.65 percent on Thursday, which wiped out all the week's gains.

In Seoul, South Korean stocks are likely to remain under pressure amid concerns about the outlook for the local economy, which continues to struggle in the face of weak domestic demand.

The composite index lost 3.8 percent over the week to 751.53 points on Friday. Heavy selling by foreign investors, especially in market leader Samsung Electronics, brought the index down to its lowest level since May 18 when it finished at 741.99.