Oil Prices Raise the Stock Market

The commodity sector, especially mining, is a favorite in the stock market this week. The composite stock price index (CSPI) closed up significantly with 59.485 points (1.114 percent) to 5,399,885. The increase is in line with other Asian stock exchanges in line with rising global oil prices.

Yesterday the mining sector stock index (14/10) closed up 0.67 percent so that it increased the accumulated increase in the year to date from the beginning of the year to 53.72 percent.

The increase was the highest when compared to other stock sectors. In the second place, there are stocks of various industries that recorded an increase of 30.71 percent year-on-year.

"The commodity sector is the favorite this week with prices relatively strong ahead of winter," said Lanjar Research Analyst Reliance Securities.

    World oil prices strengthened at the weekend. The price of WTI oil yesterday afternoon rose to the level of USD 50.4 per barrel. Based on Nymex data, world oil prices move around USD 51 per barrel, up 1.11 percent until last night.

Local market participants are more dominant. Foreign investors actually recorded net sales of Rp 615.8 billion. Indonesian economic data that was able to withstand external pressure this week such as foreign exchange reserves, retail sales levels, the release of several reports on banking financial performance, and sentiment for appointing new ministers were considered pro-market.

Related to the actions of foreign investors, according to Lanjar this week the flow of funds has fluctuated. At the beginning of the week, foreign investors looked optimistic with the highest net buy record since last month. Then, on weekends, net buy decreases. As a result, this week foreign investors recorded a net sale of Rp 751.46 billion.

The majority of stock markets in Asia yesterday also closed higher. Most surprising is the Thai stock market. Although the White Elephant Country was saddened by the death of the King, its stock exchange actually increased 6.71 percent at the weekend.

During the week, Asian exchanges tend to experience pressure. One of them is the projection of the percentage of interest rates in the US after the employment data is released. Also, doubt Russia on the OPEC agreement, Saudi-led oil exporters cartel cut production in the near future.

Jawa Pos, Page-6, Saturday, Oct 15, 2016.