Jakarta. Since hitting an all-time high at 7,359 on Jan. 4, 2024, the composite index of the Indonesia Stock Exchange (IDX) has been moving sideways. 

Daniel Wiguna, Sucor Sekuritas' Head of Online Trading, said that the sideways movement is influenced by a potential slowdown in interest rate reductions in the US.

"The slowing interest rate prompts investors to reinvest in the US as their interest rates are still considered relatively high and attractive for investment in dollar-denominated instruments," said Daniel Wiguna in Jakarta on Monday.

The index dipped by 0.12 percent, settling at 7,218.7 during the mid-day trading session. 

Expectations of a slowdown in inflation have sparked speculation about potential interest rate cuts by the Federal Reserve this year. However, some policymakers may postpone these plans, originally anticipated for March. Investors are closely watching Thursday's key US inflation reading for insights into future interest rate trends. Additionally, the US government will release fourth-quarter GDP data on Wednesday, expected to show a 2 percent growth following a 4.9 percent rise in the previous quarter. As Federal Reserve officials enter a blackout period before the upcoming Federal Open Market Committee (FOMC) meeting on Jan. 30-31, market attention remains focused on these economic indicators.

Daniel noted that Wall Street indices, including Dow Jones, S&P, and Nasdaq, are currently in positive territory. Simultaneously, all US bonds, along with their yields, are undergoing corrections. The US dollar is also maintaining a level of around 103.5.

"It's intriguing because the price of gold remains above $2,000 per troy ounce, indicating an anomaly here. Typically, if the price of gold rises, instruments associated with stocks or risk instruments would experience corrections, but everything is still in the green zone," he elaborated.

Daniel predicts a potential correction from IDX's all-time high to 7,200, and its trajectory will remain relatively stable until the end of January, before going upward in February. Investors are anticipating the Chinese New Year effect on Feb. 10, 2024.
 

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