IHSG Closes Lower Tracking Asian Markets Amid Geopolitical Sentiment

The Indonesia Stock Exchange (IDX) Composite Index (IHSG) closed lower on Monday, tracking a regional downturn as markets reacted to geopolitical tensions in the Middle East. The IHSG weakened by 1.63 points, or 0.03 percent, to 6,234.50, while the LQ45 index of top stocks bucked the trend, rising 2.69 points or 0.43 percent to 623.93.

Associate Director of Research and Investment at Pilarmas Investindo Sekuritas, Maximilianus Nico Demus, noted that Asian bourses started the month on a weak footing, influenced by developments in the Middle East despite US President Donald Trump calling off a planned strike on Iran. Trump stated that Saudi Arabia and other key Middle Eastern allies had urged him to halt the attack and continue negotiations, while also pressing for the swift reopening of the Strait of Hormuz. However, market participants remain sceptical about de-escalation between the US and Iran, given the repeated failures to secure a permanent peace agreement.

From China, a private survey indicated that the manufacturing PMI fell to a four-month low of 50.9 in July 2026, down from 51.7 in June and missing the 51.5 forecast. Meanwhile, the People’s Bank of China reaffirmed its commitment to supporting the economy through moderately accommodative monetary policy, flexible use of instruments, and ensuring ample liquidity.

Domestically, Indonesia’s manufacturing index rose to 50.2 in July 2026 from 46.9 in June, though the market viewed the growth as sluggish due to expensive raw materials, declining exports, and cautious business sentiment. The Central Statistics Agency reported deflation of 0.14 percent month-on-month, with annual inflation at 2.88 percent, below market expectations of 3.2 percent and within Bank Indonesia’s target range of 1.5 to 3.5 percent. Additionally, Indonesia’s trade balance recorded a deficit of 450 million US dollars in July.

The IHSG opened higher but moved into negative territory by the end of the first trading session and remained in the red through the close. Four sectors posted gains, led by consumer non-cyclicals which rose 1.47 percent, while seven sectors declined, with technology falling the deepest at 1.42 percent. Total trading volume reached 37.64 billion shares worth Rp14.31 trillion, with 300 stocks advancing, 374 declining, and 289 unchanged.