Commencement Signaled for Indonesia's Stock Market

The Indonesian stock market ended Friday on a down note, with the Jakarta Composite Index (JCI) finishing at 7,830.49, a decrease of 1.53 percent. This marked a snap in the two-day winning streak the market had been on.

The weakness on Wall Street seemed to have influenced the Indonesian market, as some traders looked to cash in on the recent strength in the markets. The Dow, NASDAQ, and S&P 500 all ended with losses on Friday. For the week, the S&P 500 eased 0.1 percent, the Dow and NASDAQ both dipped 0.2 percent.

The weakness was due to profit taking, as some traders sought to secure their gains. The data increased confidence that the Federal Reserve will lower interest rates, but a September rate cut may already be priced into the markets, according to CME Group's FedWatch.

Crude oil prices also fell on Friday due to concerns about overproduction, as OPEC agreed to increase crude production by 547,000 barrels per day in September. West Texas Intermediate crude for October delivery was down $0.60 or 0.93 percent at $64.00 per barrel.

Locally, several Indonesian stocks experienced varying degrees of decline or rise. Among the actives that experienced changes were Bank CIMB Niaga, Bank Mandiri, Bank Danamon Indonesia, Bank Negara Indonesia, Bank Central Asia, Bank Rakyat Indonesia, Indocement, Semen Indonesia, Indofood Sukses Makmur, United Tractors, Astra International, Energi Mega Persada, Astra Agro Lestari, Aneka Tambang, Vale Indonesia, Timah, Bumi Resources, and Indosat Ooredoo Hutchison.

The Indonesian stock listed company that lost the most value on the last trading day was Aneka Tambang, which fell by 3.42 percent. Vale Indonesia followed closely with a drop of 3.36 percent.

Inflation figures for July were also released, with overall inflation up 0.3 percent on month and 2.37 percent on year. Core CPI rose an annual 2.32 percent.

Later today, Indonesia will release July figures for imports, exports, and trade balance, as well as August data for consumer prices. These figures are expected to provide further insight into the nation's economic health.

The global forecast for the Asian markets is soft, with oil and technology shares expected to lead the way lower. Traders seem to have ignored a Commerce Department report showing U.S. consumer prices increased in line with estimates in July.

As the week comes to a close, the Asian bourses are expected to follow the negative lead from the European and U.S. markets. Investors will be keeping a close eye on economic indicators and geopolitical developments in the coming days to gauge the direction of the markets.