Delayed Celebration: IHSG Surges 2.69% in First Session to 6,041

Investors on the Indonesia Stock Exchange breathed a sigh of relief this morning. After the Composite Stock Price Index (IHSG) closed with a 3.56% plunge yesterday, the index strengthened sharply today with all sectors in the green. The IHSG briefly opened in the red before accelerating to a 2.69% gain, reaching 6,041.93 at the close of the first trading session. A majority of stocks, or 535 listed companies, were in positive territory, while 139 declined and 134 remained stagnant. Despite the significant rise, transaction value was relatively moderate at only Rp 7.97 trillion, involving 13.71 billion shares in 1.03 million trades. Market capitalisation remained below Rp 11,000 trillion, precisely at Rp 10,618 trillion. According to Refinitiv data, the IHSG’s strengthening was broad-based, with all sectors in the green. The utility sector rose 4.35%, technology gained 3.17%, and consumer non-cyclicals added 3.05%. In terms of index contributors, large-cap stocks were the main engine of the rally. PT Bank Central Asia Tbk (BBCA) was the largest contributor, adding 18.74 points to the IHSG. It was followed by PT Mora Telematika Indonesia Tbk (MORA) with 14.35 points, PT Bank Rakyat Indonesia (Persero) Tbk (BBRI) with 14.11 points, PT Astra International Tbk (ASII) with 9.58 points, and PT Bank Mandiri (Persero) Tbk (BMRI) with 7.04 points. Support also came from BRPT, BREN, TLKM, DSSA, and BBNI. Entering Thursday’s trading, the IHSG’s movement is expected to remain influenced by sentiment from the MSCI review results, which maintained Indonesia’s Emerging Market classification. The decision eased market concerns over the potential for massive foreign capital outflows had Indonesia’s status been downgraded to Frontier Market. However, MSCI still provided notes regarding share ownership transparency, alleged coordinated trading, and the effectiveness of capital market reform implementation, which will be re-evaluated in November 2026. Domestically, the Financial Services Authority (OJK) and the government assessed that MSCI’s decision reflects continued strong global investor confidence in Indonesia’s financial markets. The OJK affirmed it will continue reforms to strengthen market integrity and transparency, while the government considers MSCI’s further evaluation a normal process. On the external side, investor attention is shifting to the release of the United States Personal Consumption Expenditures (PCE) inflation data, which serves as the Federal Reserve’s main reference in determining the direction of interest rate policy. If PCE inflation shows another increase, expectations of higher-for-longer interest rates could strengthen, driving a stronger US dollar and higher Treasury yields, potentially triggering pressure on risk assets including the IHSG and the rupiah. Additionally, the market is also awaiting weekly US jobless claims data to gauge the latest condition of the labour market. The combination of persistently high inflation and a solid labour market could reinforce the view that the Fed does not yet have room to cut rates soon. Amid these sentiments, the US dollar index, which has breached the 101.609 level, remains a factor limiting the rupiah’s and the domestic stock market’s room for strengthening, amid increased pressure on capital flows to developing countries. According to Refinitiv data, the rupiah was forced to remain in the red after closing 0.50% weaker at Rp17,925 per US dollar on Wednesday. With that position, the Garuda currency has been unable to escape pressure and has weakened for four consecutive trading days.