IHSG Closes Higher on Cheap Valuations and Optimism Over Corporate Performance
The Indonesia Stock Exchange (IDX) Composite Index (IHSG) closed higher on Tuesday afternoon, driven by cheap valuations of Indonesian stocks and optimism over corporate financial performance for the first half of 2026. The IHSG closed up 108.24 points, or 1.74 percent, at 6,340.02. Meanwhile, the LQ45 index of 45 leading stocks rose 8.89 points, or 1.42 percent, to 636.64.
Market analyst and Founder of Republik Investor, Hendra Wardana, stated that the sustainability of the IHSG’s strengthening in the coming period will be determined by three main factors: the consistency of returning foreign capital flows, the stability of the rupiah so that it does not breach Rp18,000 per US dollar, and the ability of issuers to deliver financial performance that exceeds market expectations.
Hendra explained that corrections in major global markets, particularly in technology stocks that previously experienced an artificial intelligence (AI) euphoria, have opened opportunities for investment rotation into emerging markets with cheaper valuations, including Indonesia. He noted that with the IHSG’s relatively more attractive valuation compared to several regional markets, Indonesia has the potential to become a destination for foreign capital inflows if domestic macroeconomic conditions remain stable.
Market expectations for improved corporate performance through second-quarter and first-half 2026 financial reports are seen as a positive catalyst for the near term. Sentiment is also supported by the potential for rupiah stability, backed by Bank Indonesia’s commitment to maintaining the exchange rate and Indonesia’s high government bond yields compared to other countries.
However, Hendra cautioned investors to remain vigilant about several risks that could still hinder the market recovery process, with the most important being the rupiah exchange rate. He warned that if the rupiah weakens again and breaches the psychological level of Rp18,000 per US dollar, pressure on the domestic financial market could increase, potentially triggering renewed selling by foreign investors and raising concerns about inflation and economic stability.
The IHSG opened higher and remained in positive territory until the close of the first trading session, continuing its gains through the second session. Based on the IDX-IC sectoral indices, ten sectors strengthened, led by the energy sector which rose 3.58 percent, followed by the property and raw materials sectors which gained 2.95 percent and 2.60 percent respectively. The healthcare sector was the sole decliner, falling 1.23 percent.
Top gainers among stocks included SULI, JGLE, TRON, MLPT, and AGAR, while KOKA, OMRE, PAMG, FILM, and JELI led the decliners. Total trading frequency reached 2,896,000 transactions, with 47.79 billion shares traded worth Rp21.54 trillion. Overall, 439 stocks advanced, 221 declined, and 305 remained unchanged.
In regional markets, Japan’s Nikkei index strengthened 3.29 percent, China’s Shanghai index rose 1.79 percent, Hong Kong’s Hang Seng index weakened 0.04 percent, South Korea’s Kospi surged 3.56 percent, and Singapore’s Strait Times index gained 0.45 percent.