The Jakarta stock index broke the 1,000 points mark for the first time on Thursday, cheered by a positive economic outlook, weak US dollar and a fall in global oil prices, analysts said. Indonesia announced lower-than-expected inflation for November, raising expectations sustained low interest rates would help boost share prices.
Many analysts said a 7.5 percent fall in US crude prices overnight helped push markets around the Asia-Pacific region to multi-year highs. "As the upward pressure on inflation has eased, the possibility for interest rates to go up has become less likely. The rates might even stay flat or go down," Fendi Susiyanto, senior equity analyst at BNI Wealth Management, told Reuters. "This condition is very favourable for the Jakarta equities market."
A few minutes before the midday break, the index was up nearly 1.5 percent to 1,000.78 points. At the break the market had slipped back slightly to 1,000.22 points.
Turnover was heavy at 1.4 trillion rupiah ($155 million) worth of shares. Jakarta shares have sustained a strong upward trend in recent weeks and some leading brokerages have upgraded their forecasts and outlooks for Indonesian companies.
Among the gainers on Thursday morning were the largest telecommunications company, PT Telekomunikasi Indonesia Tbk (Telkom), which jumped nearly three percent to 5,250 rupiah.
Standard & Poor's Ratings Services on Wednesday raised its long-term local currency ratings on Telkom, PT Hanjaya Mandala Sampoerna Tbk, and PT Indonesian Satellite Corp Tbk. (Indosat).
Indosat shares gained 1.75 percent to 5,800 rupiah, while the country's second-largest listed cigarette maker, Sampoerna, rose 2.2 percent to 7,050 rupiah.
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