(RTTNews) - The Indonesian stock market has finished higher in two of three trading days since the end of the four-day losing streak in which it had declined more than 120 points or 5 percent en route to a two-month closing low. The Jakarta Composite Index moved back above the 2,370-point plateau, but now analysts are expecting the market to pull back slightly at the opening of trade on Thursday.

The global forecast for the Asian markets is mixed with a touch of upside, as support from the commodities on rising prices could be offset by selling among the financial and technology sectors. The European markets were sharply higher, while the U.S. bourses ended little changed - and the Asian markets are forecast to see mixed trade.

The JCI finished sharply higher on Wednesday, driven higher by the miners and commodities.

For the day, the index jumped 37.75 points or 1.6 percent to finish at 2,371.86 after trading between 2,334.94 and 2,371.90. Volume was 4.3 billion shares worth 3.1 trillion rupiah. There were 163 gainers and 45 decliners.

Among the gainers, Energi Mega Persada surged 16 percent, while Bakrie Development jumped 11 percent, Bumi Resources climbed 7.6 percent, Aneka Tambang soared 8.1 percent, Indo Tambangraya Megah added 6.3 percent, Adaro Energy gained 3.3 percent, Semen Gresik was up 3.6 percent and Kalbe Farma gathered 4.9 percent.

Wall Street provides little guidance as stocks closed mixed for a second straight session on Wednesday, giving up earlier gains following news that the Federal Reserve left interest rates near record lows amid continued economic concerns. The major averages finished on opposite sides of the unchanged mark, extending their lackluster performance.

The choppy trading came after the Fed left its target for the federal funds rate unchanged in a range from zero to a quarter percent and reiterated its assessment that “exceptionally” low rates will continue for an “extended period.”

Heading into the announcement, the Fed was expected to leave rates unchanged, though there had been some expectation that the central bank would start to pave the way for an eventual rate hike down the road.

The equity markets saw considerable upside this morning as traders bought into the market despite a pair of rather lukewarm economic reports.

The Institute for Supply Management said that activity in the service sector grew for the second consecutive month in October, but the pace of growth unexpectedly slowed compared to the previous month. The index of activity in the service sector edged down to 50.6 in October from 50.9 in September, with a reading above 50 indicating growth in the sector. The decrease by the index came as a surprise to economists, who had expected the index to rise to 51.5.

Separately, Automatic Data Processing, Inc. reported that private sector employment continued to decrease in the month of October, although the pace of job losses slowed for the seventh consecutive month. Non-farm private employment fell by 203,000 jobs in October following a revised decrease of 227,000 jobs in September. Economists had expected a loss of 198,000 jobs compared to the decrease of 254,000 jobs originally reported for the previous month.

The major averages all saw notable downside in late day trading, pushing the tech-heavy NASDAQ into negative territory. The NASDAQ closed down by 1.80 points or 0.1 percent at 2,055.52, while the Dow rose by 30.23 points or 0.3 percent to 9,802.14 and the S&P 500 gained 1.09 points or 0.1 percent to close at 1,046.50.

In economic news, Indonesia’s central bank on Wednesday left its key interest rate unchanged for a third month in a row, saying that inflation is not posing any risks currently.

The Bank Indonesia retained its reference rate at 6.5 percent, where it has been staying since August. The decision was in line with economists’ expectations.

The central bank said in a statement that the Indonesian economy continued to improve in October. Exports are expected to recover in line with global economic recovery. The apex bank forecasts the domestic economy to expand 4.3 percent this year and 5.5 percent next year. It added that annual GDP growth in the fourth quarter would be better than the third quarter.

The central bank forecasts Indonesia’s inflation rate to remain at its lowest level between 3.5 percent and 5.5 percent in 2009 and it may accelerate to be between 4 percent and 6 percent next year. In October inflation unexpectedly slowed to a nine-year low of 2.57 percent. The central bank said inflation may continue to decline in the medium term.

In other news, the Indonesian central bank is likely to start hiking interest rates in the first quarter of 2010, ING’s Singapore-based Chief Asian economist Tim Condon said in a note.

ING expects inflation to accelerate toward 7 percent by mid-2010 as the final leg of the boom-bust-boom in commodity prices of the last 18 months works its way through the CPI. “Poorly anchored inflation expectations make the exit strategy issue more prominent in Indonesia than, for example, in the Philippines,” Condon wrote.

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Posted in Categories: Eurozone, Releases, Stocks, USA.

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