Morning Dew - 6 August 2014

Economy Slowed, Return to Deficit

JCI was knocked by economic data, bringing the index down 0.2% or 10.16 points to 5,109.09 after briefly pierced the 5,100 mark.

GDP data showed that 2Q14 saw economy grew by 5.12% (YoY), slower than 1Q14 (+5.21%). Quarter-to-quarter, the GDP expanded by 2.47% while during the first half GDP showed growth by 5.17% (YoY).

Trade balance swung into deficit in June as exports amounted to US$15.42bn whilst imports amounted to US$15.72bn.  Hence, the balance swung back to a deficit of US$0.30bn.

Earlier yesterday, July CPI was reportedly at 0.93% (MoM) while Jan-July inflation reached 2.94% and year-on-year CPI was at 4.53%. Core CPI was up 0.52% (MoM), while year-on-year core CPI reached 4.64%. For the first seven months, inflation was at 2.4%.

USDIDR ticked down to end at 11,733 per US$ from 11,747 per US$ on Tuesday.

Global Data

China Manufacturing PMI slowed to 54.2 in July vs 55.0 in June, for service sector the index fell to 50.0 from 53.1 while the composite index fell to 51.6 from 52.4.

From the U.S., the Markit US Services PMI fell to 60.8 in July from 61.0 a month earlier while the ISM for non manufacturing composite ticked up to 58.7 from 56.0.

U.S. factory orders went up by 1.1% in June after a 0.6% decline in May.

Technically Speaking...

JCI held steady above the 5,100 mark on Tuesday after it started the week on a solid footing.

The next resistance lies at 5,165, the recent intraday high. Beyond this the index will aim at 5,251 – the all-time high seen last year.

Near-term supports are seen at 5,039 and 5,000, followed by 4,950, the former EMA-50 resistance now turned as support. 

MACD ticked down heading towards the zero line, while RSI has continued to slip below the overbought area accompanied by declining volume.

SMRA and WSKT recos are still awaiting their entry prices to be filled, in addition ADRO has been added in queue. Please check the details on the table below.

Day Ahead

Election appeal to the Court, the next cabinet and the tremor from recent slew of economic data such as inflation, GDP and trade deficit will be the catalysts in the play. Steep fall in the US stocks will put pressure on the already under-pressure JCI. Later this week, the US nonfarm payrolls will once again sap the market attention.

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