Stocks, rupiah rebound slightly from Monday's panic
A'an Suryana, The Jakarta Post, Jakarta
The Jakarta Stock Exchange (JSX) index made a stunning recovery on Tuesday after suffering from panic selling the previous day, following the weekend bomb blasts in Bali, which took almost 200 lives.
The index closed at 342.20 on Tuesday, up 4.729 points from Monday's close of 337.47.
Similar positive news came from the currency market with the rupiah strengthening to Rp 9,285 from Rp 9,330 on the previous day after Bank Indonesia's intervention.
Zulfikar, a stock analyst from Mandiri Securities, said that a technical rebound had helped the stock index rise on Tuesday.
"The panic selling pushed the stock index down to the bottom on Monday. Now, after rationality comes back, the stock index is recovering," Zulfikar told The Jakarta Post.
The Jakarta Stock Index plunged on Monday to its lowest level in four years at 337.47 amid panic selling following the Bali bomb blasts.
According to Zulfikar, the stock index would incrementally improve in the coming days and could stand between 350 to 370 until December this year.
It cold be very difficult for the index to go any higher than that level, as the regional and international markets remained bearish after a string of accounting scandals in the United States and worries over possible war between U.S. and Iraq, said Zulfikar.
On the currency market, Bank Indonesia succeeded in stabilizing the rupiah after it suffered a significant drop on Monday.
The amount of funds injected to the market by the bank to support the currency remained unclear. On Monday, the bank apparently injected between US$13 million and $14 million to buy the currency.
"However, the positive development could not assure that the rupiah would continue to improve in the coming days, as speculators would still attack the rupiah," said Pardy Kendy, a currency analyst and one of directors at PT Bank Buana.
Meanwhile, Asian stock markets closed mostly higher Tuesday, with prices surging in Tokyo and Hong Kong, on the back of three straight sessions of gains on Wall Street.
Japan's benchmark 225-issue Nikkei Stock Average rose 307.12 points, or 3.6 percent, to end at 8,836.73.
It was the Nikkei's biggest one-day percentage gain since rising more than 5 percent on March 4.
The Nikkei closed up 89.99 points, or 1.1 percent, Friday. Japanese financial markets were closed Monday for a national holiday.
In Hong Kong, the Hang Seng Index rose 370.66 points, or 4.1 percent, to end at 9,336.39. It was the biggest percentage point gain in nearly a year.
Brokers said prices were boosted by three straight sessions of gains on Wall Street, with investors shrugging off a weekend bombing attack that killed nearly 200 people on Indonesia's tourist island of Bali.
On the currency market, the deadly bombing in Bali continued to cast a pall over Asian currency markets Tuesday, traders were quoted by Dow Jones as saying.
The contagion was evident mainly in neighboring Southeast Asian currencies, with the Singapore dollar, the Philippine peso and the Thai baht all slipping to multi-month lows.
Against the Singapore dollar, the U.S. unit was quoted around S$1.8069 late in Asia, up from S$1.7986 late Monday, but off a peak of S$1.8070, which was its highest level since mid-May.
The U.S. dollar ended at a fresh 14-month high of 53.135 pesos on the Philippine Dealing System, up from 53.030 pesos at the previous session close, but off a day's high of 53.170 pesos as the market focused on the threat of terrorism in the region, and also on tensions between the U.S. and Iraq.