Jakarta Protests Weaken Stock Index as Market Fears Political Instability

TEMPO.CO, Jakarta - The Jakarta Composite Index, or JCI closes down on Thursday's trade amid market concerns about political instabilities in the country. At the Indonesia Stock Exchange (IDX) this afternoon, indices weakened, led by financial stocks. 

The JCI closed with a correction of 65.90 points, or 0.87 percent, to 7,488.68. The LQ45 index fell 8.00 points, or 0.85 percent, to 934.36.

"Asian exchanges tend to move in a mixed direction as a number of sentiments give color to today's financial market trading. Market players seem to be reacting to the release of the latest Fed minutes, which gave the message that most members agree and want to lower interest rates at the next meeting," Pilarmas Investindo Securities Indonesia research team said in its review in Jakarta, Thursday, August 22.

The market is also looking forward to Bank of Japan Governor Kazuo Ueda's speech to the Diet tomorrow, which is expected to shed some light on the direction of the central bank's monetary policy.

Meanwhile, trade tensions between China and the European Union are once again a concern, with China launching an investigation into subsidies on imports of dairy products from the EU in response to rising tensions between the two parties, which will include several dairy products such as fresh and processed cheese.

Domestically, the market seems to be concerned about political instability and internal security as a result of the heated political drama surrounding the rules for the regional head election (Pilkada) towards the end of this year.

The Constitutional Court's (MK) ruling on the criteria for nominating regional heads was overturned by the legislative body of the House of Representatives (DPR), which then revised the draft law on regional elections. Today the House was to hold a plenary session to ratify the bill.

The DPR's action has caused discontent among the public, leading to demonstrations at the DPR/MPR building in protest of the ratification of the revised Pilkada Law.

The Jakarta Composite Index opened in the red by the end of the first trading session. The index continued to weaken in the second session until the close. 

Based on the IDX-IC Sectoral Index, all eleven sectors declined, led by the Financials sector with a correction of 1.57 percent, followed by the Infrastructure and Technology sectors, which declined by 1.46 percent and 1.43 percent, respectively.

The four sectors with the largest corrections were Basic Materials (-0.94 percent), Consumer Discretionary (-0.28 percent), and Infrastructure (-0.19 percent).

Among the issuers, TMPO, JAWA, NZIA, LABA, and BNLI were the biggest gainers. Meanwhile, the biggest decliners were BBKP, IOTF, MPPA, MLPL, and ENRG.

Today's trading saw 1,086,358 deals involving 18.42 billion shares with a total value of Rp39.59 trillion. In total, 194 stocks gained, 389 declined, and 202 unchanged.

Today's recap in regional markets included Nikkei's 0.68 percent gain to 38,211.00, Hang Seng's 1.44 percent appreciation to 17,641.00, Shanghai's 0.27 percent correction to 2,848.77, and Strait Times' 0.01 percent drop to 3,373.58.

ANTARA

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