Jakarta, CNBC Indonesia – The Composite Stock Price Index (IHSG) was noted to have continued to weaken significantly. Until 10.50 the index still lost 110.12 points.
That decline equates to a decline of 1.62%. At that time, JCI was at the level of 6,703. Meanwhile, the index bottomed out at 6,680.
The forecast for the International Monetary Fund (IMF) is one of the sentiments that has hindered the move by the JCI.
Though horrified, the prediction was not without reason. This is because the three main engines of the world economy, namely the United States (US), China and the European Union, will slow down.
“We estimate that one third of the world economy is in recession. Even countries that are not in recession will feel a recession for hundreds of millions of people,” IMF Managing Director Kristalina Georgieva said in an interview with CBS takes on the nationquoted Wednesday (4/1/2023).
In China, China’s economic pace in 2022 is likely to lag behind global economic growth for the first time in 40 years due to a spike in Covid-19 cases, Georgieva said.
“For the first time in 40 years, China’s growth in 2022 is likely to be below or below global growth,” Georgieva said.
This condition is expected to continue for the next few months as well.
Meanwhile, Georgieva said, the US economy is on the sidelines and can avoid the full-blown contraction that will likely hit a third of the world economy.
“The US is the most resilient, it can avoid a recession. We see the job market remains quite strong,” he said.
However, this in itself presents a risk as it could hamper the progress that the US Federal Reserve (Fed) needs to make to bring US inflation back to its 2% target level.
“It’s a… mixed blessing because if the job market is very strong, the Fed may have to hold interest rates longer to bring inflation down,” Georgieva said.
Large cap in free fall
The forecast also affects the attitude of foreign investors. Many of them flee their money abroad.
It is in the nature of foreign investors to release large-cap stocks when taking on such positions.
The shares of the big four banks have definitely become “victims”. The price reduction was inevitable.
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Given the large cap, the weight is against the large index. BBRI has a weight of about 12.42 points against JCI. BBNI weight of 3.34 points. While the weights of BMRI and BBCA are respectively 6.02 points and 5.48 points.
Unfortunately, a number of other large-cap stocks also saw declines.
Thus, the decline in large-cap stocks also significantly detracted from JCI’s performance.
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