JCI closed higher yesterday as the rupiah and the consumer sector strengthened, as well as window dressing. Top Gainers: Consumer (+2.82%), Basic Industry (+2.69%), Agriculture (+1.52%).
The global investors awaited the Fed’s rate announcement yesterday. Asia markets closed mixed amid IPO Softbank Corp and the decline in the energy sector, relating to global crude prices. European markets were bullish thanks to the agreement on Italy budget draft. On the other side, the U.S. markets closed lower along with the Fed’s decision to reduce its balance sheet.
Today’s Outlook: Post-Fed’s Rate Hike
We forecast JCI to be sluggish with the support range of 6118-6121 and the resistance range of 6192-6198. Last night, the Fed increased its rate to 25 bps, pursuant to the market expectation. The hike was the fourth times in 2018. The Fed also estimated that there will be two times rate hikes in 2019. The Fed’s stance is in stark contrast to investors’ expectation of no interest rate hike in 2019 due to the slowdown in the U.S. economy.
From the domestic outlook, investors will await the result of Bank of Indonesia’s Board of Governors Meeting. After the Fed’s meeting, BI is estimated to put its best effort to minimize the impacts of volatilities on Indonesia’s financial markets; for example, BI is possible to re-raise its benchmark rates.
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