HARIANEXPRESS – The Jakarta Composite Index (JCI) experienced a notable surge on Thursday, climbing by 1.68 percent to settle at 6,501 points. This substantial increase, adding 107 points to the index, reflected a widespread positive trend observed across Asian markets.
Investors displayed a renewed willingness to engage in riskier assets, a sentiment primarily influenced by the decline in US Treasury yields. Additionally, Bank Indonesia’s decision to maintain interest rates further bolstered market confidence.
JCI Performance and Market Drivers
The Jakarta Composite Index demonstrated strong movement throughout the trading session, fluctuating between a low of 6,444 and a high of 6,514. The closing figure marked a significant daily gain for the Indonesian stock market.
A total of 452 stocks recorded gains during the day, significantly outnumbering the 190 stocks that declined. Another 150 stocks remained unchanged, indicating a predominantly positive market breadth.
Factors Fueling Investor Optimism
The positive performance of the JCI was largely attributed to the robust rallies seen in other Asian equities, as well as the strong showing on Wall Street. Investors largely set aside concerns arising from the latest Federal Reserve meeting minutes.
These minutes had indicated that some officials within the Federal Reserve had begun to support the idea of implementing higher interest rates. However, the market’s focus shifted instead to the declining US Treasury yields.
Lower Treasury yields are often perceived as making riskier assets, like stocks, more attractive to investors. This perception encouraged market participants to increase their exposure to such assets.
“The market is of the view that lower US Treasury yields have helped restore risk appetite,” Pilarmas Investindo Sekuritas wrote in its Thursday research note.
The decision by Bank Indonesia to hold its interest rates also contributed positively to market sentiment. This move provided additional stability and predictability for investors in the domestic market.
Trading Activity and Volume
The total trading volume on Thursday reached an impressive 78.68 billion shares. This high volume underscores the active participation of investors throughout the session.
The cumulative turnover amounted to Rp 15.79 trillion, equivalent to approximately $889.02 million. This significant turnover was spread across more than 2.28 million transactions.
Broader Economic Context
Beyond the stock market’s daily performance, related economic factors continued to shape the financial landscape. The rupiah, for instance, also extended its rally on Thursday, strengthening against the US dollar.
This appreciation of the local currency was also influenced by falling US Treasury yields and positive domestic sentiment, which helped counteract concerns about ongoing international disruptions.
Meanwhile, Indonesia’s bank credit growth had accelerated to 13.58 percent year-on-year in July, surpassing Bank Indonesia’s target range. Despite this growth, a substantial amount of approved credit facilities remained undisbursed as businesses remained cautious.
The Indonesia Stock Exchange (IDX) itself is also considering significant changes, including a plan to remove the Rp 50 minimum share price for stocks traded on the regular and cash markets. This initiative aims to enhance liquidity and price discovery for low-priced stocks.
