KIWOOM Morning Equity – 20 July 2026 This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. MARKETS WATCH MIDDLE EAST TENSIONS, BI POLICY MEETING IN FOCUS US MARKET: Wall Street closed lower in Friday's trading (17/07/26), ending the rally of the past two weeks amid a sell-off in technology stocks, particularly the artificial intelligence (AI) and semiconductor sectors. Nasdaq Composite index fell 1.40% to 25,520.24, S&P 500 weakened 1.01% to 7,457.69, while Dow Jones Industrial Average corrected 0.77% to 52,146.42. Throughout the week, Nasdaq recorded the deepest decline of 2.9%, followed by S&P 500 which fell 1.6% and Dow Jones weakened 0.9%. The weakness was triggered by profit-taking in AI stocks following a significant rally throughout the year as well as rising concerns over technology sector valuations. INDONESIA: Results of Bank Indonesia's Business Activity Survey (SKDU) show that business activity in the second quarter of 2026 increased, reflected in a Weighted Net Balance (SBT) of 12.97%, higher compared to 10.11% in the previous quarter. This increase was driven by performance improvements in the Agriculture, Forestry, and Fisheries, Construction, Mining and Quarrying, as well as Accommodation and Food & Beverage Service sectors, along with rising demand during National Religious Holidays (HBKN) and the school holiday period. Used production capacity also rose to 73.80%, while business liquidity conditions, profitability, and credit access remained well-maintained. For the third quarter of 2026, BI estimates business activity will remain in the expansion zone with an SBT of 11.75%, although slowing slightly due to seasonal normalization in the agricultural sector. Growth is projected to remain supported by the Processing Industry, Trade, Construction, and Mining sectors, accompanied by an increase in labor absorption. - In addition, the market expects Bank Indonesia (BI) to raise the BI-Rate again by 25bps to 6.00% at the July 2026 Board of Governors Meeting (RDG), with terminal interest rates potentially reaching 6.25%. These expectations are driven by inflation which is approaching the upper limit of BI's target as well as ongoing rupiah weakening pressures. On another side, domestic demand still shows weakness, reflected in the contraction of retail sales, decline in manufacturing activity, and slowing business sentiment. This condition reflects BI's policy dilemma between maintaining exchange rate stability and controlling inflation amid a domestic economic recovery momentum that is not yet fully strong. JCI closed higher by 1.10% to the level of 6,175.54. Throughout trading, JCI moved in the range of 6,079.32 – 6,192.66. Foreign investors recorded a net buy in the Regular Market of Rp725.11 billion, while across all markets foreign investors posted a net buy of Rp638.57 billion. Foreign fund inflows primarily entered through BBCA, BMRI, BBRI, TLKM, and BRIS, while foreign selling pressure was recorded in ASII, DEWA, AMMN, BRMS, and PTRO. On another side, the Indonesian Rupiah exchange rate fluctuated around Rp17,960 per US dollar on Friday, extending its gain for a fourth session. Sentiment was lifted by foreign direct investment, which surged 27.4% YoY in the second quarter, demonstrating resilient investor confidence. Technically, the index's movement is becoming increasingly constructive after successfully breaking out from the downtrend line that limited movement since April as well as moving back above the EMA10 (6,022) and EMA20 (6,003). This condition indicates a short-term trend change from bearish to bullish. In addition, the EMA10 sits above the EMA20 (bullish crossover), which reinforces early signals of a new uptrend forming. As long as JCI is able to hold above both moving averages, the opportunity to continue its strengthening remains quite open. From the momentum side, the RSI (14) is at the 56.79 level, increasing and sitting above the neutral 50 level. This shows that buying momentum is starting to dominate, but has not yet entered the overbought area, so room for an increase is still available. Chart pattern-wise, JCI also formed a rounded bottom which was then confirmed with a breakout above the resistance area of 6,120 – 6,170. JCI has strong potential to continue its strengthening to the dynamic resistance level of the EMA 50 (6,255); if it manages to break, the opportunity continues toward resistance at 6,321 – 6,377. Meanwhile, a downside scenario of profit taking could correct to support at 6,108 / 6,079 / 6,037.