Global stock markets wavered on Friday (24/03/23) with fears of a widespread bank collapse as the risk of non-performing loans at Deutsche Bank began to unfold. However, despite the pressure on financial sector stocks, the Dow managed to close the week with a 0.41% gain and the S&P500 led the way with a 0.56% gain. With the shadow of a recession ahead due to the turmoil in the banking sector, encouraging higher demand for safe-haven assets; as the market began to expect the Federal Reserve will soon put the brakes on the pace of interest rate hikes. Markets also bet on the possibility of the Federal Reserve cutting its benchmark interest rate by 90 bps to 3.9% at the end of this year. The 2-year US Treasury yield (which monitors interest rate expectations), fell around 3.5 bps to 3.7709%. European markets closed lower at the end of the week as investors anticipated a central bank rate hike this week and the latest updates from the banking sector. ECB President Christine Lagarde said that the European banking sector is resilient with strong capitalization and liquidity, after the 2008 reforms. The ECB is also ready to inject liquidity into the financial system if needed.

JCI successfully closed in the positive territory of 1% at 6762.25 level, supported by Rupiah exchange rate strengthened significantly by 1.25% to IDR 15,153/USD level on Friday trading (24/03/23). The IMF projects Indonesia’s economy to grow 5% this year on the back of the government’s success in reducing the budget deficit; amidst lingering challenges such as tightening global financial conditions or a slowdown in the world economy that could pressure the Rupiah. NHKSI RESEARCH estimates that trading at the beginning of this week has the opportunity to continue short-term bullish, testing the crucial Resistance level at 6780-6810; which if broken will end this short-term downtrend; and open up opportunities towards TARGET 6880/6950-6950. Indonesian capital market investors/traders are advised to hold Average Up until signs of a break out look valid.

Download full report HERE.