Domestically, the JCI closed relatively stagnant after moving with high volatility over the past week. This week, investors will pay attention to the release of inflation data in the US and China as well as the announcement of the Current Account Deficit (CAD) for the second quarter of 2020.
From the domestic market, the rally in the JCI still has a chance to continue ahead of today’s release of data on foreign exchange reserves. However, investors need to be aware of any profit taking after three consecutive days of strengthening.
JCI movements today will still be influenced by the market’s optimism towards economic recovery in Q3 after the 2Q20 GDP announcement yesterday. Investors have anticipated economic contraction last quarter although the GDP data is lower than expected.
Meanwhile, from within the country, Investor’s attention today will be focused on the announcement of economic growth data for the second quarter of 2020. Various institutions predicted that Indonesia’s GDP in 2Q20 will contract between 3% -6%.
Domestically, the fall of the JCI yesterday was marked by the release of large amounts of foreign funds reaching IDR1.4 trillion. The recession that has hit various countries and the lockdown policy that was re-imposed in various regions raised concerns for market participants. As for today, JCI is still likely to rebound after it still managed to close above the psychological level of 5,000.
JCI closed in the green throughout last week supported by positive sentiment regarding stimulus given to regions affected by COVID-19, where the funding will be put in Regional Development Bank. Globally, The Fed decided to hold its benchmark interest rate to support the economy.
The JCI movement in the beginning of the week will be affected by releases of domestic economic data such as July 2020 inflation and PMI. Consensus estimates that last month’s inflation will be at 0.04% monthly and 1.70% YoY.
The three major markets in the US managed to rebound in trade (07/29/2020) supported by the commitment of the Federal Reserve to continue to use all necessary steps in economic recovery. In addition, the FOMC meeting also decided to hold interest rates in the target range of 0% – 0.25%.
The JCI movement today is estimated to be still limited with a downtrend. As expected, several companies experienced a decline in net profit during Semester I/2020 as a result of the Covid-19 pandemic.
