Global and Domestic Sentiments Clash: Dollar Strengthens Amidst War and PFII Bill

The Indonesian financial market is expected to remain volatile in today’s trading, Tuesday (21/7/2026). The IHSG closed nearly 1% higher on Monday, driven by buying across almost all sectors. The strengthening occurred amidst a wait-and-see attitude from market participants ahead of several important central bank agendas this week. According to data from the Indonesia Stock Exchange (BEI) via IDX Mobile, the IHSG ended at 6,231.78, surging 56.24 points or 0.91% compared to the previous close. The index strengthening was also accompanied by an improvement in market breadth, with 399 stocks rising, 210 declining, and 185 remaining stagnant. Transaction value reached Rp17.16 trillion with a trading volume of 35.57 billion shares in 2.39 million transactions. Foreign investors recorded a net buy of Rp93.47 billion. The basic materials sector was the main support, rising 2.76%, followed by the energy sector which gained 1.86%, and the consumer staples sector which rose 1.26%. Shares of PT Bank Rakyat Indonesia (Persero) Tbk (BBRI) were the main driver of the IHSG, contributing 7.3 index points, followed by PT Barito Pacific Tbk (BRPT) and PT Telkom Indonesia (Persero) Tbk (TLKM). BBRI was also the stock most purchased by foreign investors in the first session with a net buy of Rp117 billion. In the foreign exchange market, the Rupiah failed to maintain its positive momentum against the US dollar. The Rupiah depreciated 0.42% to Rp17,960/US$ at the morning opening and briefly weakened further to Rp17,990/US$ before paring losses towards the close. This movement contrasted with the previous Friday’s close when the Rupiah sharply strengthened 0.53% to Rp17,885/US$. The escalation of conflict in the Middle East has increased investor caution and pushed oil prices higher, keeping demand for the US dollar as a safe-haven asset elevated. From the monetary policy side, the market still expects the US Federal Reserve to hold interest rates at its upcoming meeting. The CME FedWatch Tool indicates an 85.6% probability of a rate hold. However, the Fed’s policy direction is clouded by differing views among officials, with Cleveland Fed President Beth Hammack suggesting rates may need to rise to curb persistent inflation. In the bond market, the yield on the 10-year SBN rose 0.32% to 7.290%, indicating selling pressure. On Wall Street, US stock markets weakened as oil prices rose following the latest escalation of military action between the US and Iran. The S&P 500 fell 0.19%, the Nasdaq Composite slipped 0.05%, and the Dow Jones Industrial Average corrected 0.59%. A more than 2% drop in Apple shares weighed on the blue-chip index. The US launched a ninth consecutive day of strikes on Iran, though sentiment briefly improved after an Iranian foreign ministry spokesman hinted at a diplomatic resolution. Oil prices later strengthened again after President Donald Trump threatened Iran. US WTI crude closed up 0.9% to US$83.23 per barrel, while global benchmark Brent rose about 1.3% to US$89.22 per barrel. Meanwhile, Yemen’s Houthi group announced a maritime embargo against Saudi Arabia.