Jakarta, CNBC Indonesia – World stock markets, including Indonesia, are predicted to strengthen early next week, following the victory of Joe Biden in the election in the United States (US Presidential Election) defeating the incumbent Donald Trump.
It’s just that investors are asked to be vigilant because the Composite Stock Price Index (IHSG) as the reference index on the Indonesia Stock Exchange (IDX) has the potential to be exposed to investor profit taking, aka profit taking.
IDX data records, in the last week (2-6 November), JCI shot up 4.05% and last month trading rose 6.73%. Last Friday, JCI closed up 1.43% at 5,335.53 positions.
“But after that it is very prone to profit taking due to the huge increase in the last week. In addition, the potential for political disputes in the US has brought opportunities for market players to take profit. Resistance [batas atas] JCI at the level of 5,381 to 5,500 and support [batas bawah] at the level of 5,246 to 5,161, “said capital market observers and Director of Anugerah Mega Investama, Hans Kwee, to CNBC Indonesia in Jakarta, Sunday (8/11/2020).
He said the US elections that had taken place and the results on November 3, 2020 were the attention of market players.
Indexes in the majority stock market rose in response to the potential for Joe Biden to win the election.
“Market participants are very concerned about the presidential election because it affects US policy going forward,” he said.
According to him, Biden’s victory has the potential for a trade war between China and the United States not to get worse. There is hope that the US trade war with China, Europe and Mexico will stop. This tends to lower market risk and reduce market volatility.
“This tends to make world currencies strengthen against the US dollar including the yuan, euro, and others. The rupiah has not lagged behind and has strengthened significantly in several days. This has also pushed funds into risky assets in emerging markets,” he said.
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Photo: President-elect Joe Biden stands on stage after speaking on Saturday, November 7, 2020, in Wilmington, Del. (AP / Andrew Harnik) President-elect Joe Biden reacts as he stands on stage after speaking Saturday, Nov. 7, 2020, in Wilmington, Del. (AP Photo/Andrew Harnik)- – |
Another sentiment for the capital market next week is that the increase in the Covid 19 case is still a concern of market players. The increase in cases has forced several countries to re-lockdown and is likely to hinder the ongoing trend of economic recovery.
The UK, for example, is implementing a second lockdown to suppress the increase in the number of Covid-19 cases. Italy and Norway are also tightening restrictions due to the increase in Covid-19 cases.
Biden is also considered to be more pro-health so that he has the potential to push for a tight lockdown in the United States to deal with the new corona pandemic that is now happening. The economic lockdown due to the pandemic has the potential to reduce economic activity and has the potential to encourage a correction in the stock market.
Meanwhile, he also mentioned that Indonesia’s economy in the 3rd quarter of 2020 officially experienced a recession with negative growth of -3.49%.
But this growth is better than negative -5.32% in the second quarter and better than many other countries in the world. US election results make the most currency volatile against the dollar such as the Japanese yen, rupiah and Korean won strengthened.
“The potential for foreign funds will return to emerging markets. Indonesian Government bonds also have the potential to receive positive sentiment due to the perceived exchange rate of the rupiah. undervalued , relatively low cost of hedging and yield [imbal basil] The US Treasury will still be low, “he concluded.
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