The Dow closed higher by 0.56% or 186 points, underpinned by a rally in the communication sector, followed by Nasdaq +1% and S&P500 +0.69% as the market welcomed the US Inflation data (Dec.), which supposedly released on Thursday beginning to show a decline so the Fed could be more dovish. Investors/traders around the world are keeping a close eye on the US CPI (Dec.) announcement, which is expected to fall back to 6.5% YoY (vs. previous 7.1%), thereby possibly shrinking the US Core Inflation (Dec.) as well to 5.7% YoY (vs. previous 6%). If the inflation can contract according to the above forecast and as has been depicted by the US employment data that has begun to calm, then a Fed Fund Rate hike of only 25bps will be considered to be implemented at next month’s FOMC Meeting.
JCI trimmed nearly 1%, triggered by a 3.18% decline in the Finance sector, down by 65.8 pts to 6622.5, following most other Asian indices that also fell on Tuesday. Foreign net sell recorded at IDR515.4 billion, making the total foreign net sales of YTD still at IDR2.34 trillion (all market). Moreover, the JCI closing position, which is still relatively maintained around the 6640-6600 Support area (and RSI is still consistently positive divergence), does not inspire bottom fishing. Instead, it seems that the market prefers to be cautious in anticipation of the US Inflation data release. NHKSI Research suggests the market be more vigilant & focus on the 6600-6570 Support area rather than expecting JCI to immediately break the 6700-6730 Resistance to be able to head towards: 6780-6790/6850/6900.
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