Jakarta, CNBC Indonesia – Russia’s war with Ukraine is still the main factor influencing the movement of global stock markets this week. However, the Jakarta Composite Index (JCI) recorded a slight decline of 0.08% to 6,922,602.
The JCI movement was much better than other Asian stock markets. The Shanghai Composite Index plunged 4%, South Korea’s Kospi fell nearly 2%, and the Malaysian stock market also slumped more than 2.2%. Only Singapore’s Straits Times index was able to gain 0.57%.
The flow of foreign capital into the country is one of the pillars of the JCI movement. Last week, the stock exchange for the pride of the country even set an all-time high of 6,996,935. Last week, foreign investors recorded a net buy of Rp 4.42 trillion.
However, the flow of capital in the stock market is very dynamic, “it doesn’t come, it doesn’t go home.” So the risk of foreign funds turning out of course is also high which can make JCI depressed.
In the regular market this week, foreign investors are still doing net buy of IDR 1.3 trillion, but in the negotiable and cash market it occurs net sell almost Rp 12 trillion.
Thus, the whole year is total net buy in the regular market, it is Rp. 28.9 trillion in the regular market, while when combined with the negotiable and cash market, the total is Rp. 17.44 trillion.
The war between Russia and Ukraine is still a pressure on global stock markets. Russian troops are reported to be getting closer to the Ukrainian capital, Kyiv, making market players’ sentiment worsen since Thursday night which made stock markets in Europe and the United States (US) plummet, Asian markets also followed today.
CNBC International reported one of the officials at the Pentagon mentioned if the Russian troops were already about 15 kilometers from Kyiv. The official also believes Russia plans to besiege Kyiv.
In addition, data from the United States (US) showed inflation in February rose 7.9% year-on-year (yoy) touched the highest level in more than 40 years.
The US Treasury Secretary, Janet Yellen, even predicted that US citizens would find inflation very high and uncomfortable.
“I think there is a lot of uncertainty associated with Russia’s war with Ukraine. And I think it will sharpen inflation. I don’t want to make predictions about what will happen in the second half of this year. We are likely to see very high and uncomfortable inflation,” Yellen said as proclaimed CNBC InternationalThursday (11/3).
The Fed has predicted high inflation, but if it lasts for a long time it will certainly be a problem, and the Fed can act very aggressively in raising interest rates.
The possibility was expressed directly by the chairman of the Fed, Jerome Powell.
“We will be cautious when studying the implications of the war in Ukraine on the economy. You have an expectation that inflation will peak and then decline later this year. If inflation gets higher or more persistent, we will prepare to raise rates more aggressively by raising interest rates.” more than 25 basis points at one or more meetings,” Powell said.
If inflation continues to rise, of course, the Fed could be more aggressive in raising interest rates, which usually has a negative impact on the stock market.
CNBC INDONESIA RESEARCH TEAM
(pap/pap)
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