Indonesia Stocks May Reverse Recent Losses

The Indonesian stock market has finished lower in back-to-back sessions, giving away more than 70 points or 1.8 percent on its way to a fresh two-month closing low. The Jakarta Composite Index settled just above the 3,720-point plateau, and now analysts are predicting a modest rebound at the opening of trade on Monday.

The global forecast is mixed with a hint of upside on easing concerns regarding the Greek debt crisis. Airlines are expected to provide support, along with property stocks and financials, while commodities remain slightly soft and technology stocks could see profit taking. The European markets finished slightly higher and the U.S. bourses were mixed but little changed - and the Asian markets are tipped to follow that lead.

The JCI finished modestly lower on Friday following losses among the mining stocks and agricultural companies.

For the day, the index declined 18.17 points or 0.49 percent to finish at 3,722.30 after trading between 3,704.58 and 3,759.20. Volume was 5.2 billion shares worth 4.6 trillion rupiah. There were 161 decliners and 71 gainers.

Among the actives, Aneka Tambang lost 2.4 percent, Bakrie Sumatera Plantations shed 1.2 percent and London Sumatra dropped 3.2 percent, while Bank Mandiri added 0.7 percent and Bank Rakyat Indonesia collected 0.8 percent.

The lead from Wall Street provides little clarity as stocks gave back ground on Friday after failing to sustain an initial upward move. The early strength was partly due to reassuring comments from French President Nicolas Sarkozy and German Chancellor Angela Merkel regarding efforts to provide further financial assistance to Greece.

After a two-hour meeting in Berlin, Sarkozy and Merkel announced that they had reached an agreement under which Germany would drop its demand that private investors participate in a new Greek bailout package, indicating that the participation of private creditors would be voluntary. Sarkozy called the agreement a "breakthrough" and noted that France and Germany want the new round of financial assistance to be worked out as quickly as possible.

However, a report from Reuters and the University of Michigan showing a notable deterioration in consumer sentiment in the month of June may have helped to offset some of the early buying interest. Reuters and the U of M said that the preliminary reading on their consumer sentiment index came in at 71.8 in June, down from the final May reading of 74.3. Economists had been expecting the index to edge down to a reading of 74.0.

News that Moody's placed Italy's credit ratings on review for possible downgrade also contributed to some market weakness. The reaction to the news reflected the continued concerns about the financial situation in Europe. Source: RRTNews