Wall Street and global shares went upwards earlier this week on favorable economic data and bargain hunting after the market weakness last week, which was the biggest decline this year. However, market gains was failing to stay within 1% as investors remained vigilant over speculation of higher interest rate hikes in the US & Europe. US Core Capital Goods Orders (Jan.) increased above estimates, and Pending Home Sales (Jan.) data also rose to the highest level in 2.5 years. At the same time, comments from Federal Reserve officials seemed to warn against any illusion that inflation would return quickly to the Fed’s target (2%), with the US’s cost of goods and services still stubbornly high. Global oil prices retreated as the dollar’s recent strength discouraged buying, though losses were limited by supply concerns after Russia halted exports to Poland via a key pipeline.

JCI closed flat earlier this week, with a bit of caution ahead of Inflation (Feb.) data coming on Wednesday. Market sentiment was also affected by the release of government debt data, which reached IDR 7754.98 trillion (Jan.), an equivalent to a GDP ratio of 38.56%; a slight increase from last December’s position of IDR 7733.99 trillion. On the other hand, the weakening Rupiah exchange rate to IDR15,274/USD apparently managed to support foreign buying interest of IDR 3.39 trillion, with blue chip bank stocks as their main target. However, NHKSI RESEARCH advises traders/investors to maintain a HOLD (WAIT & SEE) stance and wait for more data before deciding to Average Up; as JCI needs to climb towards critical MA10 & MA20 Resistance (above 6880-6890, or 6900 to be safe) while maintaining MA50 Support (6825-6800) to avoid a bearish turn.

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