Market Recap
JCI rallied yesterday amid the release of widening trade balance deficit and BI’s stance to hold its benchmark rate unchanged. Top Gainers: Misc. Industry (+3.72%), Infrastructure (+2.78%), Consumer (+2.08%).
The U.S. markets and Asia markets mostly rallied yesterday along with the communication between the two countries relating to the trade war. Asia markets were backed by Theresa May’s statement about the updated Brexit. Meanwhile, European market finished lower amid Brexit resignations.
Today’s Outlook: BI’s Robust Commitment
Today we estimate JCI to rally further with the support range of 5924-5930 and the resistance range of 5997-6008. The main positive sentiment is the result of BI’s Board of Governors Meeting held yesterday. BI surprisingly took pre-emptive action to maintain the rupiah stability by raising its benchmark rate by 25 bps to 6.00%. Its pre-emptive stance is pivotal as Indonesia still faces the headwinds of current account deficits.
BI’s stance was positively responded by foreign investors. Yesterday’s foreign net buy was at high level of IDR1.37 trillion. The rupiah is significantly appreciated this morning as it hovers at 14,500 after it was at 14,700 per USD.
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