The Fed’s interest rate cut would be the first in more than four years
Jakarta (MidLand) – The Indonesian Stock Exchange (BEI) Composite Stock Price Index (IHSG) closed higher on Friday afternoon, led by technology stocks.
JCI closed up 13.97 points or 0.18% at 7,812.12. Meanwhile, the group of 45 major stocks in the LQ45 index rose 0.87 points or 0.09% to 959.35.
“Market participants see an opportunity for a 25 basis point cut in the benchmark interest rate, which will rise to 87% after the release of PPI data from 50% a few days ago. “The Fed’s interest rate cut will be the first in more than four years, as the Fed has become more focused on fighting inflation,” Indonesian research team Phillip Sekuritas said in its office in Jakarta on Friday.
US Producer Price Index (PPI) data shows that inflation at the producer level increased by 0.2%. month by month (mtm) in August 2024, after not growing (0% (mtm)) in July 2024 and above market forecasts of a 0.1% (mtm) increase.
On an annual basis, the PPI index rose slowly to 1.7%. year on year (yoy)that is, the lowest in six months, from 2.1% (y/y) in the previous month and below market expectations of 1.8% (y/y).
Core inflation increased by 0.3% (mtm) or 2.4% (y/y), after falling by 0.2% (mtm) or 2.3% (y/y) in July 2024 and above market expectations of an increase of 0.2% (mtm) and 2.5% (y/y).
From the American labor market, the data Initial Unemployment Claims showed that the number of people receiving unemployment benefits for the first time rose by 2,000 last week to 230,000, in line with market estimates and signaling that the number of layoffs (PHK) remains low despite the overall slowdown in the labor market.
The combination of a stable labor market and relatively high inflation undermines the Fed’s chances of cutting its benchmark interest rate by 50 basis points next week.
With a stronger opening, JCI remained in positive territory until the close of the first trading session. In the second session, JCI remained in the green zone until the close of stock trading.
According to the IDX-IC sector index, five sectors strengthened, first of all the technology sector with 4.09%, followed by the healthcare sector and the consumer non-staples sector which grew by 0.76% and 0.58% respectively.
Meanwhile, five sectors fell, namely the energy sector, which recorded the largest decline with -0.75%, followed by the raw materials sector and the real estate sector, which decreased by 0.49% and 0.40% respectively.
The stocks that strengthened the most were PKPK, KMDS, MLPT, TFAS and FPNI. Meanwhile, the stocks that weakened the most were HOMI, SMLE, SRTG, KARW and LABA.
The stock trading frequency was recorded at 1,120,997 transactions with the number of traded shares amounting to 25.46 billion shares worth IDR 27.54 trillion. A total of 244 shares increased, 328 shares decreased and 225 shares remained unchanged.
Regional Asian stocks this afternoon saw the Nikkei index fall 251.50 points or 0.68% to 36,581.80, the Hang Seng index strengthen 128.69 points or 0.75% to 17,369.08, the Shanghai index weaken 13.03 points or 0.48% to 2,704.09 and the Strait Times index rise 6.11 points or 0.17% to 3,562.64.
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Reporter: Muhammad Heriyanto
Editor: Faisal Yunianto
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