IDX Composite Opens 4% Lower; Investors Advised to Wait and See Before Averaging Down

The Indonesia Composite Index (IHSG) on the Indonesia Stock Exchange (BEI) moved lower on Monday (8/6/2026), triggered by a combination of domestic and global sentiments. The index opened 108.46 points or 1.94% lower at 5,486.31, and continued to decline by 222.29 points or 3.99% to the 5,371.78 level by 09:15 WIB.

“Kiwoom Research still suggests adopting a ‘wait and see’ approach before taking a buying position or averaging down,” stated Liza Camelia Suryanata, Head of Research at Kiwoom Sekuritas, in her analysis in Jakarta on Monday.

Internationally, the primary market theme is a shift in focus from hopes of interest rate cuts towards the risk of additional rate hikes by the US Federal Reserve. According to CME FedWatch, the market is now fully pricing in one 25 bps interest rate hike before the end of the year, and is even beginning to factor in the possibility of further increases.

US Nonfarm Payrolls for May 2026 increased by 172,000 jobs, far exceeding the expectation of 85,000, while the unemployment rate remained at 4.3%. Strong economic data has become bad news for the stock market, as it reinforces the belief that inflation may persist longer. “This could lead Fed Chairman Kevin Warsh to potentially adopt a more hawkish stance than current market expectations,” said Liza.

This week, market participants will focus on the developments in US negotiations with Iran and Israel’s response following Iran’s missile attack on the Ramat David airbase over the weekend. “Developments regarding the Strait of Hormuz will be a determining factor for oil prices, global inflation, and interest rate expectations,” Liza noted.

Additionally, investors will closely monitor the communication tone of Kevin Warsh and other Fed officials, following the very strong labour data that has altered market expectations regarding the direction of monetary policy.

Meanwhile, Chinese President Xi Jinping will conduct a state visit to North Korea on 8-9 June 2026, at the invitation of Kim Jong Un. This marks Xi’s first visit to Pyongyang since 2019 and the first by a Chinese President in seven years. This relatively rare visit by Xi, considering his increasingly limited foreign travel in recent years, is viewed as an effort by Beijing to maintain its strategic influence over North Korea and anticipate changes in the balance of power in East Asia.