The JCI also gained at the beginning of the week, supported by news that government funds have been allocated to several local banks and the new record in gold price. However, today’s movement predicted to be limited with potential of profit taking after yesterday’s significant gain.
The lack of positive sentiment from the domestic market has caused the JCI movement to close sideways this week. Currently, market participants still respond positively to the development of Covid-19 vaccine. On the other hand, the government has also prepared steps to anticipate contraction in the second and third quarter GDP through a revolving fund distribution program especially after a number of countries such as Singapore and South Korea recorded a contraction in the second quarter.
For the JCI movement this week, investor focus will also be on the latest developments of the US-China conflict, where the Chinese government has ordered the closure of the US consulate in Chengdu in retaliation. It is feared that this will disrupt the commitment of the phase 1 trade agreement.
The direction of the JCI movement towards the end of this week will be overshadowed by profit taking after rising significantly cumulatively this week. YCI successfully closed slightly above the 5,140 resistance level yesterday, but investors need to be aware of the decline that occurred in the US stock exchange.
JCI still tends to move flat in line with the lack of new sentiment from within the country. Investors will await the release of GDP data and financial statements of issuers in the Q2 / 2020 period. Indonesia’s economic growth in the second quarter / 2020 is expected to experience a fairly deep contraction.
The JCI movement this morning will try to continue yesterday’s high. In addition to news from the Eurozone, the development of the Covid-19 vaccine which will enter phase III and rising commodity prices is expected to be able to sustain the index.
The JCI movement was restrained by the weakening of Rupiah against US Dollar, which had redeemed IDR14,800 /USD. However, news of the development of the Covid-19 vaccine and the agreement on a new stimulus package are expected to be able to hold the pace of the index down.
The trade balance surplus and decision to cut benchmark interest rate by BI were the domestic sentiments for IDX composite. Globally, development of the corona vaccine that has mostly entered phase II and III are responded positively by investors.
This week, the JCI movement will be directed more by developments from abroad. Investors will focus on important events, such as meeting of EU heads of state in Brussels to negotiate economic recovery policies. From the US, the congress is also scheduled to hold a meeting to discuss further stimulus packages.
