Down 4 per cent, Analysts Warn Rupiah Pressure Weighing on JCI

Analysts from MNC Sekuritas, Herditya Wicaksana, have warned that pressure on the Rupiah has weighed heavily on the movement of the Jakarta Composite Index (JCI). On Monday (18/05), the JCI weakened by 320.76 points, or 4.77 per cent, to a position of 6,402.56 during trading at 11:04 WIB on the Indonesia Stock Exchange.

“We can observe that the correction in global markets and the majority of Asian markets, combined with the continued pressure on the Rupiah exchange rate against the US Dollar—currently at the level of Rp 17,676 per US Dollar—is weighing on the JCI movement,” said Wicaksana when contacted in Jakarta. Furthermore, he noted that the JCI is also burdened by announcements from global index providers MSCI and FTSE, which continue to freeze certain Indonesian stocks and remove several issuers from their constituents.

As geopolitical conflicts persist, Wicaksana observed that this has caused global crude oil prices to rise above 100 US dollars per barrel, heightening investor concerns regarding future inflationary pressures and a global economic slowdown. Meanwhile, capital market observer Reydi Octa noted that the JCI’s weakness was triggered by a combination of global sentiment and domestic technical pressures. “The market is still shadowed by ‘risk-off’ sentiment due to the escalation of geopolitical tensions in the Middle East, the weakening Rupiah, and aggressive foreign selling in big-cap stocks. The ongoing effects of MSCI rebalancing also loom over the JCI today,” said Reydi.