3 Main Reasons for Today's JCI Slump According to Analysts

The Jakarta Composite Index (JCI) recorded a sharp correction during Wednesday (3/6) morning trading. As of 11:10 WIB, the index weakened significantly by 255.71 points, or 4.13%, to the 5,939.71 level.

Stock analyst from MNC Sekuritas, Herditya Wicaksana, revealed that the JCI’s movement remains in a downtrend phase and has not yet shown signs of reversal. Based on market data, there are three primary factors causing the JCI to plummet today:

First, the primary factor weighing on the capital market is the depreciation of the Rupiah against the US Dollar. In Wednesday afternoon trading, the Rupiah exchange rate was recorded at Rp17,928.50 per US Dollar. Herditya noted that this currency weakness is the main negative sentiment driving the deep correction in the JCI.

In addition to macro factors, pressure is also coming from within the exchange. Shares of large-cap conglomerate issuers recorded significant declines. This follows a period two days prior when this group of stocks strengthened sharply, hitting the upper auto-reject limit (ARA). Profit-taking or corrections in these heavy-weight stocks have become the main drag on the index.

Money market observer Ibrahim Assuaibi added that global conditions are further exacerbating the situation. Rising geopolitical tensions in the Middle East have triggered an increase in global crude oil prices. WTI crude prices were recorded at 94.58 US Dollars per barrel, while Brent stood at 96.72 US Dollars per barrel. This rise in energy commodity prices has strengthened the US Dollar position, exerting dual pressure on the domestic financial market.

As of the time of reporting, analysts predict there is no opportunity for a rebound in the near future, as technically, the JCI remains in a valid downward trend.