IHSG Closes Lower Amid Rupiah Pressure and MSCI Sentiment

Jakarta (ANTARA) - The Composite Stock Price Index (IHSG) of the Indonesia Stock Exchange (BEI) closed lower on Tuesday afternoon by 46.72 points or 0.68 percent to the level of 6,858.9. Meanwhile, the LQ45 index instead strengthened slightly by 0.18 percent to 669.84. Head of Research at Phintraco Sekuritas, Ratna Lim, in her analysis in Jakarta on Tuesday, assessed that the rupiah’s weakening beyond Rp17,500 per US dollar, along with market anticipation of a potential reduction in Indonesia’s stock weighting in the MSCI index, became the main negative sentiments for the IHSG’s movement. “The rupiah’s weakening to a new lowest level, as well as anticipation of a weighting reduction by MSCI (Morgan Stanley Capital International), became negative factors driving the IHSG’s decline,” said Ratna. This yield increase was caused by rising oil prices, which heightened concerns over the widening state budget deficit, thus continuing the rupiah’s weakening to a record low of Rp17,525 per US dollar. Ratna explained that the rise in bond yields is not only occurring in Indonesia but also in several other countries. In the United States (US), government bond yields are increasing ahead of the release of inflation data. Meanwhile, in the UK, government bond yields have risen to the highest level since 2008 amid pressure on the UK Prime Minister to resign from his position.