Today’s Outlook:

• US Indices fell slightly on Tuesday, with the S&P 500 struggling to reach the all-time high set a month ago, as traders weigh headwinds on the global trade and inflation fronts. The broad market index inched down 0.1%, while the Nasdaq Composite ticked down 0.5%. The Dow Jones Industrial Average lost 206 points, or 0.4%. Earlier on Tuesday, the S&P 500 was less than 0.1% away from its intraday record. Energy was the best-performing sector in the S&P 500, rising 1.9%. Halliburton and Valero Energy led the advance. Tech stocks also ticked higher. Pullbacks of more than 1% in consumer discretionary and communication services weighed on the broader market. Meta Platforms lost 3%, while Amazon dropped 2%. Wall Street is coming off a winning week for the major averages. The Dow gained roughly 0.6% last week, while the S&P 500 advanced 1.5%. The Nasdaq rose 2.6%.

• MARKET SENTIMENT: The Fed’s FOMC Meeting Minutes will be released. On the other side of the pond, UK’s January CPI data will be posted at a forecasted hotter-than-usual 2.8% YoY. For local sentiments, Bank Indonesia’s (BI) is highly anticipated to hold its target rate at 5.75%

• EUROPE : The pan-European Stoxx 600 closed 0.32% higher at 557.17 points, the latest in a series of records this month. European markets closed higher on Tuesday, hitting another record high, as defense stocks continued to gain on expectations of higher national spending. The Stoxx 600 Aerospace and Defense index, which also hit a record high during Monday’s session, rose another 1%, with Polish defense equipment maker Lubawa jumping 14% and German defense manufacturer Renk Group gaining 2.7%. European leaders held an emergency summit in Paris on Monday to discuss how to respond to the apparent decision to sideline Europe, and while they agreed on increasing defense spending, there was no alignment over whether to send peacekeeping troops to Ukraine after any peace deal.

• The euro was 0.3% lower at $1.05, while sterling also eased 0.3% to $1.26.

• ASIA : Asia-Pacific markets traded mixed Tuesday, a day after Chinese President Xi Jinping signaled support to the country’s private sector and urged businesses to “show their “talents.” Japan’s benchmark Nikkei 225 ended the day 0.25% higher at 39,270.40, while the broader Topix index advanced 0.31% to close at 2,775.51. South Korea’s Kospi gained 0.63% to close at 2,626.81 while the small-cap Kosdaq rose 0.67% to 773.65. Mainland China’s CSI 300 Index lost 0.88% in choppy trading to close at 3,912.78. Hong Kong’s Hang Seng index rose 1.59% to close at 22,976.86, while the Hang Seng tech ended the day up 2.54% at 5,639, reversing course from the losses in the previous session after Xi’s comments in a rare closed-door symposium. Indian markets remained in negative territory with the Nifty 50 trading 0.28% lower, while the BSE Sensex index was down 0.21% as at 1 p.m. local time.

• The Reserve Bank of Australia has slashed interest rates for the first time in four years, although policymakers said it remains too early to declare victory over inflation and further cuts are not guaranteed. Officials at Australia’s central bank warned that rolling out a series of quick reductions could cause a recent disinflationary trend in the country to stall. Following the quarter-point cut in the RBA’s key cash rate to 4.1%, markets are now pricing in two more drawdowns in 2025. But, speaking in a news conference, RBA Governor Michele Bullock said the decision does not imply that “future rate cuts [are] along the lines suggested by the market are coming.” Unlike many of its global peers, the RBA has been relatively slow to announce cuts to borrowing costs, choosing instead to keep rates steady for more than a year in a bid to progressively slow price growth. The Australian dollar’s AUD/USD pair was only marginally lower by 0.1% at 0.6352 USD after some initial volatility in the wake of the RBA’s decision.

• CURRENCY AND FIXED INCOME : The U.S. Treasury yields were higher Tuesday after a day’s holiday, as investors looked toward the Federal Open Market Committee meeting minutes later this week and digested a bond sell-off in Europe. The 10-year Treasury yield was up 6.6 basis points at 4.535%, while the 2- year Treasury yield was up more than 3 basis points at 4.297%. One basis point is equivalent to 0.01%, and yields share an inverse relationship with prices. The move higher comes after European bond yields increased significantly Monday on expectations that countries across the region will hike their defense spendingThe U.S. dollar strengthened on Monday, as investors assessed key negotiations between U.S. and Russia on a deal to end the war in Ukraine and lingering tariff concerns, as well as an interest rate reduction by Australia’s central bank. The U.S. dollar index, which measures the greenback against a basket of major currencies, rose 0.4% to 106.99. The index declined more than 1% last week.

• COMMODITIES : OIL prices rose on Tuesday as traders assessed the fallout from drone attacks on a key conduit for Kazakhstan’s oil exports, while talks to end the war in Ukraine turned traders cautious as it could boost Russian supplies. Brent crude futures rose 61 cents to $75.83 a barrel, while U.S. West Texas Intermediate crude futures rose $1.10, or 1.6%, to $71.84 a barrel, catching up with the gains Brent registered on Monday, when the U.S. contract traded without settlement due to a holiday. U.S. crude oil and gasoline stockpiles were expected to have risen last week, while distillate inventories likely fell, a preliminary Reuters poll showed on Tuesday. Gold rose 1.2% to $2,932.94 an ounce, while gold futures expiring in April rose 1.8% to $2,952.04 an ounce. Gold prices jumped Tuesday, shrugging off a jump in the dollar on bets that strong demand from central banks are likely to continue. But broader metal prices came under pressure from a stronger dollar.

• Russian and U.S. officials ended their first formal meeting in years on Tuesday, after more than four hours of laying the groundwork for talks to end the war in Ukraine. The meeting between U.S. Secretary of State Marco Rubio and Russian Foreign Minister Sergei Lavrov began earlier Tuesday morning in Saudi Arabia and marked the first formal sit-down meeting between top U.S. and Russian diplomats since January 2022, when then-Secretary of State Antony Blinken and Lavrov met in Geneva just weeks before Russia invaded Ukraine. U.S. Envoy Steve Witkoff and National Security Adviser Mike Waltz participated in the talks, while Lavrov was accompanied by Kremlin Aide Yury Ushakov, according to Russian state media.

• INDONESIA will allow small businesses to manage mines in the commodities-rich country for the first time and broaden access for religious groups, the latest populist policy to emerge under President Prabowo Subianto in his first months of rule. Legislators in the Southeast Asian nation’s parliament, which is dominated by Prabowo’s coalition, on Tuesday passed an amended mining law, giving small and medium enterprises and cooperatives priority access to local mining permits, including for coal and metals. The SMEs and cooperatives will have to be located in the region of a given concession to get the priority treatment and will be able to secure the permits without going through the traditional auction process, he said. Most concessions in Indonesia have historically been held by companies based in capital Jakarta, he added. The amendment came as the Indonesian president is seeking to make good on populist pledges in his first months at the helm of Indonesia’s $1.4 trillion economy, including by rolling out a nationwide free-meals program for students and expanding access to health care.

• JCI is nearing its 6950 resistance with a large Net Foreigner Buy amounting to IDR 231.12 bn in the regular market yesterday which broke the consistent daily outflow. This recent show of strength has been coinciding with the rebound on the Composite’s strong support at 6531. Meanwhile, RUPIAH has reached a weaker 16,269 after bouncing up from 16,177 support. Considering all the sentiments above, NHKSI RESEARCH thinks that the threat of further consolidation today is still there, therefore investors/traders should be mentally prepared in case JCI has to test Support 6550-6500 again for the second time in this month.

Company News

• BDMN: Slumped 9.42 Percent, BDMN’s 2024 Profit Remains IDR 3.17 Trillion
• BCIC: Jumping 11.09 Percent, BCIC’s 2024 Loans Reached Rp26.53 Trillion
• MEGA: Pefindo Affirms idAA- for CT’s Bank (MEGA), Here’s Why

Domestic & Global News
AHY Believes IKN Budget Will Be Disbursed Amid State Budget Efficiency
Trump Ready to Impose New Tariffs of 25% on Cars to Semiconductors, Effective April 2, 2025

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