Stock Market Consolidation Anticipated in Indonesia on Friday
Asian Markets Rally on Anticipated Fed Rate Cut
Asian markets are expected to trade mostly higher or cautiously positive on Friday, following dovish comments by Federal Reserve Chair Jerome Powell that hinted at a possible interest rate cut in September.
The U.S. Federal Reserve's indication of a likely 25 basis points rate cut in September due to inflation risks and a weakening labor market has caused equity markets globally, including Asian equities, to rally. This Fed tilt toward easier monetary policy is the main driver of market positivity rather than the U.S.-Russia meeting itself.
The MSCI Asia Pacific Index is close to record highs, reflecting market optimism driven by the Fed's dovish stance, with China stocks notably rallying on rate cut hopes. Thailand's SET Index, exemplifying Asian markets, is expected to trade sideways to slightly up in line with global markets, supported by the Fed's signaling of easier monetary policy.
Commodities like gold have rallied amid declining yields and a weaker dollar, consistent with Fed easing expectations, which indirectly supports risk assets in Asia.
However, it's worth noting that individual company performances vary. For instance, the Jakarta Composite Index (JCI) added 38.34 points on Thursday, with the cement and food sectors contributing to its gain. On the other hand, Bank CIMB Niaga, Bank Mandiri, and Bank Rakyat Indonesia experienced losses on Thursday.
European markets were up, and U.S. bourses were mixed and flat. The Dow Jones Industrial Average shed 11.01 points on Thursday, while the NASDAQ and S&P 500 ended little changed and at a record high, respectively.
The U.S. and Russian presidents are expected to meet later today in Alaska to discuss ways to end the Russia-Ukraine war. However, the impact of this meeting on Asian markets is not emphasized in the available information, with the focus remaining on the Fed’s monetary policy outlook as the primary market driver.
The Indonesia stock market has been rising for five consecutive sessions, with the JCI currently above 7,930 points. Asian central banks and markets are monitoring the Fed’s moves closely, yet no clear new market movement is attributed directly to the U.S.-Russia meeting on the Russia-Ukraine war.
Crude oil jumped on Thursday ahead of the U.S.-Russia presidents' meeting, with West Texas Intermediate crude for September delivery up $1.32 or 2.11 percent at $63.97 per barrel. The hotter-than-expected producer price inflation data partly offset optimism about a September interest rate cut.
In summary, current information shows Asian markets are responding positively mainly due to the anticipated Fed rate cut rather than direct reactions to the U.S.-Russia meeting about Ukraine, as the latter's impact is not reflected in immediate market moves reported on August 25, 2025.
In the context of the Fed's hinted interest rate cut, the financial industry anticipates a rally in business activities across Asian markets, with the MSCI Asia Pacific Index and China stocks demonstrating increased optimism. Commodities like gold, supported by declining yields and a weaker dollar, are also likely to prosper in this easing monetary policy environment in Asia. However, it's essential to note that individual company performances within Asian economies may still exhibit variations, as demonstrated by the cement and food sectors' contributions to the Jakarta Composite Index's gains while certain banks experienced losses.
