The JCI movement at the beginning of the week will tend to consolidate while looking for new directions after the long holiday. The market will consider several sentiments and movements from global markets that occurred during the last week.
Trade balance data showing an increase in surplus were still able to lift the JCI yesterday. As for the announcement of the 7-DRRR interest rate today, markets tend not to expect changes. Approaching the long holiday, the JCI movement is prone to profit taking.
JCI managed to be in the green for 5 consecutive days supported by foreign inflow especially on large cap stocks in the banking sector. Meanwhile, the recovering Retail Sales Index and Fitch Rating maintaining “BBB” rating were also positive sentiments for the JCI.
The JCI direction during this short week will be influenced by Trade Balance position and benchmark Rate announcement. Indonesia’s trade balance position is estimated to still be in a surplus.
Foreign net buying that occurred in the last 2 days has been able to help strengthen the JCI this week. However, given the limited increase yesterday, the index is likely to be corrected in trading towards the end of this long week.
JCI was still continuing its rally approaching pre-pandemic level in last March. Overall, investors are still optimistic about economic recovery amid the high number of new cases. However the JCI is prone to profit taking action today after experiencing highs since the beginning of the week.
From domestic market, the JCI still has room for limited gain while testing the 5,200 level. Investors will monitor the progress of vaccine news such as the clinical trial scheduled to start in Bandung and news about Russia registering the first Covid-19 vaccine without going through phase 3.
JCI movement is predicted to remain flat today. Investors will still pay attention to developments in economic indicator data such as releases of retail sales and movements in the rupiah exchange rate.
JCI recorded slight decrease throughout last week as movements were dominated by domestic sentiments such as: inflation data release, manufacture index, 2Q20 GDP, and foreign reserves. Meanwhile, foreign investors still booked foreign net sell in the last week.
