Alert Level 1! MSCI Drama Turbulence and US-Iran Ceasefire on the Brink
Indonesia’s financial markets are expected to remain under pressure today. For a fuller projection of today’s market, see page 3 of this article.
The Composite Stock Price Index (IHSG) weakened by 0.92% to 6,905.62 during Monday’s trading (10/5/2026). The IHSG has plummeted 3.74% over the last two days.
Throughout the session, 251 stocks rose, 442 fell, and 125 remained unchanged. Trading activity was brisk, with a volume of 41.5 billion shares, transaction value of Rp20.5 trillion, and 2.8 million trades. The IHSG market capitalisation stood at Rp12,283 trillion.
Foreign investors continued net selling, amounting to Rp751.2 billion.
Most sectoral indices moved in the red zone, with only the infrastructure sector managing to stay positive.
Amid the index pressure, several stocks recorded significant surges. Shares in PT Dua Putra Utama Makmur Tbk (DPUM) soared 34.67% to Rp202, PT Dafam Property Indonesia Tbk (DFAM) rose 34.62% to Rp140, and PT UBC Medical Indonesia Tbk (LABS) strengthened 34.16% to Rp216.
However, pressure was intense on some stocks, with PT Pelat Timah Nusantara Tbk (NIKL) correcting 15% to Rp340, PT Asia Pramulia Tbk (ASPR) falling 14.91% to Rp388, and PT Sillo Maritime Perdana Tbk (SHIP) weakening 14.90% to Rp2,970.
In the currency market, the rupiah closed weaker against the US dollar during Monday’s trading (11/5/2026).
According to Refinitiv data, the Garuda currency ended the first trading day of the week in the red, depreciating 0.26% to Rp17,405/US$.
The rupiah’s movement yesterday occurred amid a strengthening US dollar. Demand for the dollar increased again as needs for safe-haven assets rose.
This sentiment was triggered by the lack of progress in diplomatic efforts to end the US-Iran conflict, which has lasted for 10 weeks.
In the bond market, the yield on 10-year government securities (SBN) eased to 6.638% on Monday. This position is the lowest since 21 April 2026.
The easing yield indicates rising SBN prices as investors buy in.
In the US stock market, Wall Street broadly strengthened during Monday’s trading, or early Tuesday Indonesian time. The rally was driven by major technology stocks, even as oil prices rose after President Donald Trump rejected Iran’s latest proposal to end the war.
The S&P index rose 0.19% to close at 7,412.84, while the Nasdaq Composite edged up 0.1% to 26,274.13. Both indices hit new intraday record highs during the session and closed at all-time highs. Meanwhile, the Dow Jones Industrial Average rose 95.31 points, or 0.19%, to 49,704.47.
Iran sent a new proposal to US negotiators focused on efforts to end the conflict that has lasted for months. The counter-offer emphasised the need to halt the war on all fronts and lift sanctions against Tehran.
Trump stated in a Truth Social post on Sunday that he did not like Iran’s response, calling it “COMPLETELY UNACCEPTABLE!”
The ceasefire that has been in place for a month between the US and Iran is now in a very fragile state, according to Trump, who also told reporters on Monday that the agreement is “extremely weak”.
Oil futures rose following these developments. US West Texas Intermediate crude surged 2.78% to close at US$98.07 per barrel, while Brent crude rose 2.88% to US$104.20 per barrel.
“The tech boom is too strong, so the rise in energy prices isn’t greatly affecting the economy or the US stock market. Everyone seems to be starting to ignore the situation in the Middle East,” Jay Hatfield, founder and CEO of Infrastructure Capital Advisors, told CNBC International.
Hatfield predicts the market will likely move sideways in the coming months as long as uncertainty from the Iran war persists. However, this pressure is seen as masked by the explosive growth in the technology sector, which he described as “unprecedented”.
Micron Technology shares rose 6.5% on Monday, supporting the market as the rally in memory chip producer stocks continues. Meanwhile, NVIDIA, a star in the artificial intelligence (AI) sector, jumped nearly 2%.
“This market doesn’t want to go down because of the tech boom,” he added.
These movements followed the S&P 500 and Nasdaq surging more than 2% and 4% respectively last week.
Both indices recorded six consecutive weeks of gains—the first since 2024—and closed Friday at all-time highs. The Dow Jones also rose 0.2% over the week, marking five weeks of gains in the last six.
Market participants need to watch several market sentiments today, both domestic and international.
Internationally, the biggest sentiment will come from war developments, while domestically it stems from the Morgan Stanley Capital International (MSCI) decision.
- War Developments
US President Donald Trump said the ceasefire with Iran is now “on the brink” after Tehran rejected Washington’s proposal to end the war.
Iran demands an end to the conflict on all fronts, including in Lebanon, compensation for war damage, lifting of the US naval blockade, guarantees of no further attacks, and restoration of its oil exports. Tehran also asserts control over the Strait of Hormuz, a route that typically carries about 20% of the world’s oil and gas supply.
Trump called Iran’s response “completely unacceptable” and said the ceasefire in effect since 7 April is now very fragile. Iran insists its demands are legitimate, while Parliament Speaker Mohammad Baqer Qalibaf warned that Iran’s military is ready to respond.