Market Players Respond Positively to Decline in Homeland Inflation, Wednesday's JCI Predicted to Strengthen Again

Illustration. (Photo: Doc. Antara)

JAKARTA - The movement of the Composite Stock Price Index (IHSG) is predicted to rebound in today's trading, Wednesday July 5, after moving down 14.96 points or 0.22 percent yesterday to 6.681.75.

Phintraco Sekuritas in its research stated that yesterday's JCI movement was influenced by global economic data that was released on the previous Monday. From the United States (US), US ISM Manufacturing PMI fell to 46 in June 2023 from 46.9 in May 2023 and relatively higher lower than expected at 47.

From the European region, the Euro Area HCOB Manufacturing PMI Final fell to 43.4 in June 2023 from 44.8 in May 2023. Meanwhile, Germany HCOB Manufacturing PMI Final fell to 40.6 in June 2023 from 43.2 in May 2023.

"The decline in the index that measures manufacturing activity is in line with the tendency of central banks in Europe to maintain the pace of monetary policy tightening," explained research by Phintraco Sekuritas.

On the other hand, the rebound from oil prices on Monday July 3 prompted a further technical rebound in a number of energy stocks in Tuesday's trading. Domestically, Indonesia's actual inflation fell to 3.52 percent yoy in June 2023 from 4 percent yoy in May 2023.

"In the manufacturing sector, Indonesia's manufacturing index rose to 52.5 in June 2023 (vs 50.3 in May 2023)," explained Phintraco Sekuritas.

For this Wednesday, JCI is sideways on Tuesday, but still maintains its position above the pivot 6680 and the Stochastic RSI maintains a positive slope.

"As long as it stays above the pivot 6680, JCI has the opportunity to test resistance at 6.730 on Wednesday," said research by Phintraco Sekuritas.

The JCI movement on Wednesday will still be influenced by the response of market players to the June 2023 inflation reduction to 3.52 percent yoy from 4 percent yoy in May 2023.

Thus, it is estimated that there will be a rotation between rate-sensitive and consumer-related stocks as a support for the JCI.

"This is based on expectations of increased consumption in line with the belief that BI's benchmark interest rate of 5.75 percent is the current terminal rate," said research by Phintraco Sekuritas.

JCI according to Phintraco Sekuritas, will move at the resistance level of 6.730-6.750 and support at the 6.630 level, with a pivot at the 6.680 level.