Jakarta Index Up on Expectation Of Interest Rate Hike

Jakarta, July 11(Antara) - The Indonesian benchmark stock index rose in the opening trade of the Indonesian Stock Exchange (BEI) on Thursday morning on expectation the country`s central bank would raise its benchmark interest rate (BI rate). The BEI index rose 25.52 points or 0.57 percent to 4,504.17 points with the index of 45 most liquid stock gaining 0.87 percent to 751.52 points. "The BEI index has the potency to extend gain on expectation that the BI rate would be raised by 25 to 50 basis points," Samuel Sekuritas` analyst Benedictus Agung said here on Thursday. The leaders of Bank Indonesia are expected to decide to raise the BI rate to curb a surge in inflation following the recent rise in the prices of subsidized oil fuels. Benedictus said the rise in the BI rate would give positive sentiment in bond market and strengthen the rupiah value. Gains recorded by Asian regional markets also give positive sentiment to shore up BEI index, he added. "Asian markets gain on expectation that The Fed would continue to go ahead with its monetary stimulus. The Fed has announced that the US economy still need significant stimulus," he said. Regional markets such as Hang Seng recorded an increase of 1.45 percent in index , Nikkei-225 posted a 0.06 percent increase in index to 14,424.72 points and Straits Times reported a 1.04 percent rise in index to 3,222.60 points.