JCI faces multiple pressures, risk of testing 5,400 remains open
JAKARTA – Jakarta Composite Index (JCI) is expected to remain volatile this week, with a bias towards further weakness in Monday's (8/6) trading after plunging 8.6% over the past week to 5,594.
The decline came as foreign investors recorded net sales of IDR 7.38 trillion during the week, amid growing concerns over the domestic market.
Analysts at Phintraco Sekuritas said JCI’s direction would be influenced by movements in the rupiah exchange rate, speculation surrounding a potential emergency Board of Governors’ Meeting by Bank Indonesia (BI), as well as concerns over a possible downgrade of Indonesia’s sovereign credit rating and changes to MSCI’s market classification for Indonesia.
Externally, negative sentiment came from Wall Street, which closed sharply lower on Friday (5/6). The Dow Jones Industrial Average fell 1.35%, the S&P 500 declined 2.64%, and the Nasdaq Composite tumbled 4.18% amid heavy selling in technology stocks.
“This week, JCI is expected to remain volatile, with support in the 5,400–5,500 range and resistance at 5,700–5,800,” Phintraco analysts said in a research note distributed to investors.
Echoing that view, analysts at BRI Danareksa Sekuritas believe JCI’s bearish trend remains intact.
In a note to investors, BRI Danareksa analysts said pressure on the rupiah, the implications of revisions to the P2SK Law for perceptions of financial regulatory independence, and developments regarding Indonesia’s credit rating assessment continued to weigh on market sentiment.
“The 5,555–5,480 area represents crucial support, while 5,700–5,800 is the nearest resistance zone,” BRI Danareksa Sekuritas analysts wrote.
Meanwhile, analysts at CGS International Sekuritas said the correction in Wall Street indices and weaker commodity prices were expected to act as negative catalysts for the domestic equity market.
At the same time, continued foreign selling activity could provide additional pressure on JCI.
According to CGS International, JCI is expected to extend its decline, with support levels at 5,450 and 5,305, while resistance is seen at 5,740 and 5,885. (KR/ZH)
