Jakarta, CNBC Indonesia – Indeks Harga Saham Gabungan (IHSG) closed in the red zone at the end of trading on Thursday (5/12/2024), amid investors digesting the statement from the chairman of the United States Federal Reserve regarding the benchmark interest rate policy.
IHSG closed down 0.18% to 7,313.31. IHSG is still at the psychological level of 7,300 at the end of trading today.
The index transaction value today was relatively quiet, reaching around Rp 9.1 trillion, involving 15.2 billion shares changing hands 1.2 million times. There were 300 rising stocks, 287 falling stocks, and 203 stagnant stocks.
By sector, the financial sector was the biggest drag on IHSG at the end of trading today, reaching 0.92%.
Along with the financial sector being the biggest burden on IHSG, some giant banking issuers became the drag on IHSG, namely PT Bank Mandiri (Persero) Tbk (BMRI) with 18 index points, PT Bank Rakyat Indonesia (Persero) Tbk (BBRI) with 10.2 index points, and PT Bank Negara Indonesia (Persero) Tbk (BBNI) with 4.7 index points.
Additionally, telecommunication issuer PT Telkom Indonesia (Persero) Tbk (TLKM) also burdened IHSG in the first session with 8 index points.
IHSG turned sour after the US Federal Reserve indicated it would be cautious in cutting its benchmark interest rate in the future.
Fed Chair Jerome Powell stated that the US economy is currently stronger than the central bank had estimated in September when it began lowering interest rates. He also signaled support for a more cautious approach to future rate cuts.
“The US economy is in very good shape and there is no reason for it not to continue. The downside risks in the labor market seem smaller, growth is clearly stronger than we thought, and inflation is slightly higher,” Powell said at a New York Times event.
Powell also explained that the half-point rate cut in September was designed to send a strong signal that the Fed would support the labor market if it continued to weaken. However, in the months that followed, revised data showed that the economy was stronger than originally forecast.
Previously on Wednesday, two other Fed officials, St. Louis Fed President Alberto Musalem and Richmond Fed President Thomas Barkin, stated that they are still waiting for data before deciding whether to lower interest rates further.
The Personal Consumption Expenditures Price Index (PCE), a key measure of US inflation, has remained stagnant in the range of 2.6%-2.8% since May, well above the central bank’s 2% target.
Although Fed officials are optimistic that price pressures will ease, they still want to see concrete evidence before continuing further rate cuts.
Meanwhile, other economic data show mixed results. US auto sales in November reached their highest level in over three years, indicating continued strong consumption.
However, major business surveys show some cooling in the service sector, with concerns about new import tariffs that could raise prices.
