Indonesian Stock Market potentially maintains stagnation on Tuesday
Asian markets are expected to open mixed on Tuesday, with some indices like Hong Kong's futures rising, while Australia's ASX 200 futures point to a slightly weaker opening [1]. Japanese markets may be closed for a holiday, reducing activity there [1].
The stronger-than-expected inflation reading in the U.S., indicated by a strong July Producer Price Index (PPI) increase, has tempered optimism about Federal Reserve rate cuts, creating a cautious trading environment [1]. This inflation data is likely to keep Asian investors alert to further macroeconomic announcements and central bank decisions.
Key focus sectors in Asia include tech stocks, supported by strong Chinese exports and earnings momentum [1].
Regarding Indonesia's stock market, while the specific performance on the latest day is not available, regional trends suggest Asian markets including Indonesia could be influenced by the broader cautious but optimistic mood relating to robust earnings and trade developments in the region [2]. Investors are particularly watching U.S. trade policies, such as tariffs, and how these impact regional trade flows and investment sentiment. Indonesia, as a key emerging market in Asia, tends to react to these broader regional and global factors.
The Jakarta Composite Index (JCI) is expected to open in the red on Tuesday. However, it's worth noting that the JCI finished modestly higher on Monday, with gains from financial shares, cement companies, and some resource shares [3].
Meanwhile, the choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of several closely watched economic reports in the coming days [4]. The global forecast for Asian markets is soft ahead of key U.S. inflation data, with the Labor Department's report on consumer price inflation in the month of July likely to be in focus today [4]. The report could impact the outlook for interest rates.
In Russia, the country shrugged off the U.S. deadline to end its war with Ukraine or face sanctions [5].
Investors are advised to monitor ongoing macroeconomic releases and trade developments for shifts in market trends throughout the day.
Sources: [1] Reuters, "Asia stocks set for mixed open as U.S. inflation data tempers rate cut hopes," 8 August 2019. [2] Nikkei Asian Review, "Indonesia's stock market reacts to regional and global trends," 8 August 2019. [3] Bloomberg, "Jakarta Composite Index," 7 August 2019. [4] CNBC, "Stocks slip as traders await key economic data," 8 August 2019. [5] Associated Press, "Russia shrugs off U.S. sanctions threat over Ukraine," 8 August 2019.
During this cautious trading environment due to the strong U.S. inflation data, Asian investors remain vigilant, paying close attention to future economic announcements and central bank decisions that could affect Asia's financial markets [1]. Despite the Jakarta Composite Index (JCI) expected to open in the red on Tuesday, investors should take note of Monday's gains in financial shares, cement companies, and some resource shares, indicating possible investment opportunities [3].
