JCI’s movement this week will be influenced by some domestic sentiments. Investors will continue to pay close attention to the rising number of Covid-19 cases in Indonesia. From the economic data side, Manufacturing PMI is expected to continue its expansive trend after booking a record high at 55.3 last month. Meanwhile, inflation in June is projected to stay low; after a reading on the 3rd week still showed a 0.11% deflation MoM.
Amid a surge in positive cases of Covid-19, the JCI was still able to rise 0.25% last week. Foreign investors made net purchases of more than IDR 2 trillion in the Cash and Negotiated market; although at the same time it also recorded a net sell of IDR 703 billion in the regular market. Starting the new week, JCI is projected to continue to consolidate in the range of 6,000 – 6,130.
The Government Bond (SUN) market closed mixed, after investors paid close attention to the Fed chairman’s statement.
Contrary to the majority of global markets, JCI continued the decline for 2 days in a row. The soaring new daily cases of Covid-19 in Indonesia, which reached 20,000, will be the main focus of market participants. Towards the end of the week, JCI is expected to move in the range of 6,000 – 6,130.
With the economic recovery going slower than expected, projection for Indonesian 2021 GDP growth was cut to 4.1% -5.1%.
Market participants responded negatively, speculating that the Fed was starting to release a small portfolio of corporate bonds, which it bought during the Covid-19 pandemic.
From the domestic market, JCI was hit again by profit taking; marked by a foreign net sell of IDR 435 billion. The decline was led by the Finance and Health sectors, which supported gains earlier in the week. Technically, JCI is expected to remain volatile in the range of 6,000 – 6,130 today.
Sentiment indicating the Fed’s hawkish policy next year, still dominated yesterday’s Government Securities (SUN) auction.
In line with the majority of global exchanges, JCI managed to rebound significantly after being depressed for the past week. Gains were led by the financial, basic materials and property sectors, which rose more than 2% each. Although there is still a chance to continue strengthening, JCI today is expected to be more limited in the range of 6,050 – 6,134.
