Jakarta, CNBC Indonesia – The Jakarta Composite Index (JCI) strengthened more than 1% in trading yesterday (10.3) to 6,264.679. With this strengthening, JCI successfully ended a 4-day decline in a row.
Apart from being successful in strengthening, another good news is that foreign investors have finally made a net buying (net buy) amounting to Rp 79 billion, after carrying out a net selling action (net sell) IDR 1.1 trillion in the previous 2 trading days.
The sentiment of market players was good yesterday, reflected in the strengthening of the US stock market (Wall Street) the previous day. The direction of the world stock market shot again Wednesday local time, the Dow Jones index even scored an all-time high.
This strengthening certainly sent positive sentiment to Asian markets today, Thursday (11/3/2021). South Korea’s Kospi Index soared 0.88%, then Japan’s Nikkei 0.2%.
However, the Indonesian financial market is off on this day, so the JCI did not take part in the “party”. If stock trading is open, it is possible that IHGS can break 6,300 again.
The improvement in sentiment of market players in the last 2 days occurred after yield US Treasury bonds. In trading Tuesday, the yield on 10-year Treasury tenor fell 5 basis points, then yesterday fell another 2.4 basis points.
Previously, it continued to climb yield Treasury to the pre-pandemic level of the disease due to the corona virus (Covid-19) makes market players worried about the possibility of this happening taper tantrum. Not only the US market, but the global market was also made anxious.
Increase yield Treasury occurs due to expectations the US economy will recover soon, and inflation will increase. When inflation increases, investing in Treasury becomes unprofitable, because yieldlower. As a result, market players let go of their Treasury holdings, and yieldhis being up.
The increase in yield due to expectations of economic recovery and rising inflation also made market players see the US central bank (Federal Reserve / The Fed) as possibly reducing the value of its asset purchase program (quantitative easing/ QE) or what is known as tapering.
The tapering was carried out in 2013, and sparked turmoil on the so-called global financial market taper tantrum.
With the decline yield Treasury, taper tantrum worries have eased slightly, and the stock market is back to cheer.
Other good news also comes from Uncle Sam’s country, the US House of Representatives (DPR) Wednesday local time has passed a draft fiscal stimulus bill worth US $ 1.9 trillion, and is now submitted to President Joseph ‘Joe’ Biden.
Biden is predicted to sign the bill on Friday, until the legitimate fiscal stimulus melts away.
In March 2020, the US government under the 45th President Donald Trump also launched fiscal stimulus to restore the US economy which had slumped due to the Covid-19 pandemic. Since then, the US stock market, which previously experienced a sell-off, has been steadily rising, setting an all-time high.
However, the current stimulus has less effect than last year’s stimulus, because with the release of this stimulus, the US economic recovery can be accelerated, and the tapering shadow haunts again.
CNBC INDONESIA RESEARCH TEAM
(pap / pap)
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