Southeast Asian markets: Indonesia gains after rate hikes
Indonesian shares rose for a second straight session on Thursday after the central bank raised interest rates, while Philippine stocks surged on stronger-than-expected second-quarter GDP and the prospect of further growth. Jakarta's Composite Index closed up 1.9 percent at the day's high of 4,103.59, pulling the benchmark from an oversold level of below 30 for the first time in almost two weeks. Its 14-day relative strength index was at 33.
Copyright Reuters, 2013
Late afternoon, Bank Indonesia announced increases of 50 basis points for two key interest rates and forecast that the current account deficit will narrow in the third quarter. The improving macro-economic outlook lifted broader market sentiment, with buying most active in large caps such as Astra International. Shares in state-backed companies rose with Telkomunikasi Indonesia extending gains from the previous session amid a share buy-back plan.
The Philippine main index jumped 3.6 percent, making it the region's top performer of the day. It also recovered about half of its 7 percent loss over the past two sessions and bounced from the oversold mark, with its 14-day RSI at 34.7 at Thursday close. Most Southeast Asian stocks staged a mild rebound, tracking gains in global markets. Stocks in Thailand and Singapore rose after 10 sessions of losses, while Malaysian stocks snapped a two-day falling streak. Signs of a delay in expected Western military strikes on Syria ended a three-day sell-off on world share markets, but investors were on edge over whether any action would trigger turmoil across the Middle East.