TEMPO.CO, Jakarta - The Jakarta Composite Index (JCI) at the Indonesian Stock Exchange (IDX) traded higher by 0.95 percent to close at 5,102.46 points as the first day of fuel subsidy cuts drew to a close on Tuesday evening, November 18, 2014.
The JCI closed higher by 48.53 points or 0.95 percent to 5,102.46 points, while the Top 45 (LQ45) Index went up by 9.37 points or 1.07 percent to close at 876.58 points at the end of Tuesday's trading session.
"The JCI breached the 5,100 mark amidst the euphoria surrounding the government's decision to cut fuel subsidies," said William Suryawijaya, an analyst for Asjaya Indosurya Securities in Jakarta on Tuesday.
William hopes that the savings that such cuts will allow could be used to benefit other, more productive sectors, which would support Indonesia's economic growth for the long run. "After the price hikes, investors will begin to look at other sectors such as infrastructure construction, healthcare, education, and agriculture," he said.
The continued influx of foreign investment into Indonesia's share market is also giving the IDX the boost it needs to support an uptrend, said William. Indeed, IDX records shows that foreign investors booked a net buy totalling Rp243.68 billion on Tuesday.
Technically speaking, continued William, the sentiment boost from the subsidy cuts will drive the JCI out of its' consolidation phase, and as such, predictions of an uptrend is warranted.
Meanwhile, an analyst for HC Capital, Yuganur Wijanarko, said that there are still more room for more hikes, which will spur even more growth for the IDX in the coming year. "Market players had hoped that the hike would be around the mark of Rp3,000 per litre," said Wijanarko. "Maintaining the price at its' current level may hold back the Index's growth in 2015."
IDX records show that there were 249,678 transactions on Tuesday, whereing 6.31 billion shares were traded with a total capitalisation of Rp5.33 trillion.
Meanwhile across Asia, the Hang Seng Index slid by 267.91 points or 1.13 percent to 23,529.17 points, while the Nikkei went up by 370.26 points or 2.18 percent to close at 17,344.06 points, and similarly Singapore's Straits Times Index also went up by 25.06 points or 0.76 percent to close at 3,313.73 points.