Airlangga Says IHSG Fall Is Due to Negative Sentiment

Jakarta (ANTARA) – Co-ordinating Economic Affairs Minister Airlangga Hartarto said the weakening of the Jakarta Composite Index (IHSG) was a normal occurrence when markets faced negative sentiment.

The government is also monitoring developments in relation to Morgan Stanley Capital International (MSCI), which has opened the possibility of downgrading Indonesia’s stock market to standalone-market status.

“It is normal for the market to fall when there is negative sentiment. But with the new seven per cent auto-rejection rule, things are relatively under control, and the index closed just above 5,000,” Airlangga said at the Presidential Palace complex in Jakarta on Monday.

Airlangga was responding to the IHSG’s movement, which saw it briefly fall below 5,000 before closing above that level. He said fluctuations in the stock index were influenced by issues and sentiment developing in the market.

“No, that’s just what it does – it goes up and down. It depends on the issues and sentiment,” he said.

On the possibility that MSCI could downgrade Indonesia’s stock market to standalone-market status, Airlangga said the process would continue until next year.

“It’s still June next year. They sometimes make a bit of a threat,” he added.

The Indonesia Stock Exchange’s (BEI) IHSG weakened on Monday following the continued impact of an announcement by global stock market index provider MSCI that it had opened a consultation on the possibility of changing the classification of Indonesia’s capital market.

The IHSG opened down 223.23 points, or 4.31 per cent, at 4,961.88. The LQ45 index of 45 leading shares fell 28.06 points, or 5.52 per cent, to 480.50.

The BEI has adjusted the lower auto-rejection limit for shares to an asymmetric seven per cent, from 15 per cent previously. The measure will apply from 19 October to 31 December 2026.

The policy, backed by the Financial Services Authority (OJK), is intended to keep securities trading orderly, fair and efficient while helping to contain market volatility.

The adjustment is also intended to give investors time to assess and absorb the information available.