Market View - 30 July 200c

Asian markets mostly ended in negative territory yesterday as investors sold their shares amid worse than expected earning results. A dissapointing US consumer confidence also became the negative catalyst for the markets. Hangseng fell 2.37% (-489 pts) to 20,135 while Shanghai plummeted 5% (-171 pts) to 3,266. Nikkei however was up 0.26% (+25 pts) to 10,113. JCI was slightly down by 0.5% (-11.29 pts) to 2,225. JCI touched its lowest at 2,190 in the start of the second session but positive opening from European markets cut JCI’s losses to ended higher at 2,225.  DJIA fell 26 pts (-0.3%) to 9,070 and Nasdaq also fell 7.75 pts (-0.4%) to 1,967 as durable orders dropped 2.5% in July, worse than the 0.6% drop market expected. The positive catalyst came from the Federal Reserve which in its beige book mentioned that the pace of economic decline slowed in June and July, indicating the worst of US downturn was closer to an end. From Japan, factory output rose 2.4% in June.  In our opinion yesterday was just another healthy correction. Technial indicator such as MACD still shows that JCI is on its upward trend. Earning results and inflation still become our catalyst. Positive review from the Fed and Japanese factory output should impact positively to our market today. We expect JCI will be moving in a 2,196 to 2,247 range. Our picks for today are Tambang Batubara Bukit Asam(PTBA, Buy, R-14,000, S-11,000), BRI (BBRI, Buy, R-7,800, S-6,500), Astra Agro Lestari (AALI, Buy, R-22,250, S-16,000), Indofood (INDF, Buy, R-2,850, S-1,730) and Semen Gresik (SMGR, Buy, R-6,250, S-5,250).