“JCI Falls Again Due to Worsening Global Market Sentiment: Impact on Big Cap Stocks”

Jakarta, CNBC Indonesia – The Composite Stock Price Index (IHSG) was observed to have fallen again in trading session I Wednesday (3/5/2023), amidst worsening global market sentiment.

As of 10:50 WIB, the JCI had fallen 1.09% to 6,788.72. The JCI also touched the psychological level of 6,700 again, after touching the psychological level of 6,900 a few days earlier.

By sector, the energy sector was the biggest weight for the JCI today, reaching 1.64%, followed by the telecommunications sector at 1.59%.

Several stocks weighed on the JCI today, where these stocks are large market capitalization stocks (big cap). In fact, some stock big cap also touched auto reject bottom (ARB).

Here are the stocks that are weighted by the JCI in session I today.

Source: Refinitiv & RTI

The shares of PT Bank Central Asia Tbk (BBCA) became the index’s biggest weight today, which was 9.14 index points.

In fact, some stock big cap someone has been monitored to have touched the ARB. These stocks were PT United Tractors Tbk (UNTR) which weighed on the JCI by 6.99 index points and PT Bukit Asam Tbk (PTBA) shares by 2.75 index points.

Global sentiment worsened again after market players in the United States (US) were worried about several problems that were haunting their country. The problems are the banking crisis, the debt ceiling, and the attitude of the US central bank (Federal Reserve/The Fed).

The banking crisis reappeared after JPMorgan Chase officially won the auction for the acquisition of First Republic Bank, which previously had been excited because it was one of the banks affected by the Silicon Valley Bank (SVB) crisis in the United States (US).

JPMorgan secured about US$92 billion in deposits on the deal, including the US$30 billion that JPMorgan and other major banks deposited into First Republic last month. The bank also took out US$173 billion in loans and US$30 billion in securities.

However, investors in the US actually released bank stocks causing a severe correction and weighing on Wall Street yesterday.

Besides that, The US is also in turmoil regarding the national debt. US Treasury Secretary, Janet Yellen said that the US will default on debt (default) on June 1.

This is due to the tough discussions to raise the US debt ceiling. The Republican-led House of Representatives (DPR) voted to raise the national borrowing limit.

There is a condition, namely a drastic reduction in the spending budget because the government is considered too extravagant, which will become a stumbling block for President Joe Biden, who comes from the Democratic Party.

“Our best estimate is that we will not be able to continue to meet all of the government’s obligations by early June, and potentially as early as June 1,” he was quoted as saying. AFPTuesday (2/5/2023).

Investors are also inclined wait and see ahead the interest rate decision of the United States (US) central bank, so that banking stocks were also less enthusiastic this morning.

The market is still waiting for the Fed’s stance on its benchmark interest rate policy, although market players have predicted that the Fed will still raise its benchmark interest rate at the Tuesday-Wednesday meeting this week.

So far, according to the CME Group’s FedWatch tool, about 91.5% of investors are betting that the Fed will raise interest rates by 25 basis points (bps). Meanwhile, 8.5% of investors are betting that the Fed will maintain interest rates.

CNBC INDONESIA RESEARCH

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Disclaimer: This article is a journalistic product in the form of views from CNBC Indonesia Research. This analysis does not aim to persuade readers to buy, hold, or sell related investment products or sectors. The decision is entirely up to the reader, so we are not responsible for any losses or profits that arise from that decision.

[Gambas:Video CNBC]