Indonesian shares are likely to continue their upward trend in the coming week following the announcement of benign inflation data Friday leading to hopes of a rate cut, analysts said.
"There is enough room for the index to strengthen next week, with predictions that the central bank will lower their interest rate by another 50 basis points," said analyst Edwin Sebayang of Evergreen Securities. Positive factors include news of a lower unemployment rate but external factors such as the weakening of the dollar may negatively affect bullish sentiment.
"The weak outlook for the US dollar will increase interest in gold-based shares such as ANTAM and INCO," Sebayang told AFP.
"World oil prices that have increased to over 60 dollars per barrel are another external constraint that should be noted," he said.
Monthly inflation for November of 0.34 percent was lower than predicted, and "good for the short term but not too good for the medium and the longer term," said Sebayang.
For the week ending December 1, the Jakarta Stock Exchange index rose 16.02 points to close at a record high of 1,734.750. Daily average volume totalled 2.80 billion shares worth 2.31 trillion rupiah (251.83 million dollars).
Sebayang said the market might face resistance at 1,760 points, with the support level at 1,715. Investors were also expected to favour banking, telecom and resources sectors in the coming week.
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