Jakarta. Indonesia’s benchmark stock index opened higher Tuesday, extending last week’s sharp rally but with signs of saturation as traders weighed profit-taking pressures and awaited fresh policy cues from Bank Indonesia.

The Jakarta Composite Index (JCI) gained 0.18 percent, or 14.25 points, to 7,912.6 at the open. That followed a 4.84 percent surge last week, when the index briefly hit an all-time intraday high of 8,017 before easing to 7,898.37. The strong advance was driven largely by technology shares.

“JCI is likely to trade mixed with a slight downside bias today,” said Oktavianus Audi, vice president of retail equity at Kiwoom Sekuritas Indonesia. He projected the index would move in a range of 7,840 to 8,000, as it is already in the overbought zone, leaving the index vulnerable to a correction.

Audi cautioned that last week’s rally, dominated by technology stocks, leaves the index exposed should sentiment in the sector fade. He added that investors are closely watching the central bank’s policy meeting on Aug. 20, which could provide direction on benchmark interest rates.

Beyond domestic policy, commodity markets may offer a buffer. Crude palm oil futures rose 3.5 percent last week to 4,500 ringgit per ton, a move that could benefit Indonesian plantation companies such as Astra Agro Lestari, PP London Sumatra, and Salim Ivomas.

Indy Naila, an investment analyst at Profina Visindo, said the market remains prone to short-term pullbacks given the lack of strong corporate or macroeconomic catalysts. “Investors should watch movements in technology and conglomerate stocks, as well as foreign fund flows. Expectations for a rate cut could revive optimism,” she said.

Naila recommended selectively adding exposure to financials and energy stocks, citing major banks as long-term picks. “BBRI could head toward Rp5,025, while BRIS has potential to reach Rp3,300,” she said.

Global sentiment is mixed. On Wall Street, the S&P 500 slipped less than 0.1 percent on Monday after three straight record highs, while the Dow Jones lost 33 points and the Nasdaq edged slightly higher. Traders are betting the Federal Reserve will deliver its first rate cut of the year in September. In Asia, Japan’s Nikkei 225 rose 0.8 percent while South Korea’s Kospi slid 1.5 percent.

Add as a preferred source on Google +