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.