IHSG Closes Sharply Lower as Market Awaits Positive Domestic and Global Sentiment
The Indonesia Stock Exchange (BEI) composite index (IHSG) closed sharply lower on Tuesday as market participants awaited positive sentiment from both domestic and global fronts. The IHSG ended the session down 177.60 points, or 3.05 per cent, at 5,643.19. Meanwhile, the LQ45 index of top 45 stocks fell 19.90 points, or 3.47 per cent, to 553.11.
"External and internal factors are weighing on the IHSG’s movement," said Maximilianus Nico Demus, Associate Director of Research and Investment at Pilarmas Investindo Sekuritas, in his analysis in Jakarta on Tuesday.
Domestically, Nico noted that market players tend to be in a wait-and-see mode, seemingly anticipating the release of economic data and still burdened by sentiment surrounding the MSCI review. Furthermore, he added, the market was also shaken by new legislation that provides comprehensive legal immunity for buyers of bonds issued by Danantara, raising concerns about governance and transparency. "This sentiment has had a negative impact, driving an outflow of foreign investor funds," Nico stated.
From the international front, market participants are awaiting the resumption of peace talks between the United States and Iran in Doha, Qatar. On the other hand, the market’s attention is focused on the consistency of both parties in creating peace in the Middle East. "Mixed signals from both sides continue to cloud the outlook, with Tehran asserting its intention to continue monitoring traffic through the Strait of Hormuz," said Liza. Previously, US President Donald Trump stated that negotiations with Tehran would continue after both parties agreed to halt a series of reciprocal attacks in the Strait of Hormuz.
From China, the manufacturing index rose to 50.3 from the previous 50.0, supported by resilient demand for high-tech exports that helped offset trade disruptions stemming from tensions in the Middle East. On the monetary policy side, China’s central bank, the PBOC, launched an overnight reverse repo operation, injecting 300 billion yuan into the financial system to strengthen short-term liquidity management and enhance stability in the money market.
Opening lower, the IHSG remained in negative territory until the close of the first trading session. In the second session, the IHSG stayed in the red heading towards the market close. Based on the IDX-IC sectoral indices, all eleven sectors weakened, with the basic materials sector falling the deepest at 5.43 per cent, followed by the energy and non-primary consumer goods sectors, which fell 3.47 per cent and 2.58 per cent respectively.
Stocks that recorded the largest gains included PEGE, AYLS, BOBA, ESTA, and ELPI. Meanwhile, stocks that experienced the largest price declines were SAME, MMIX, EPAC, PANS, and TALF. The share trading frequency was recorded at 1.6 million transactions, with a total of 19.57 billion shares traded, valued at Rp15.20 trillion. A total of 141 stocks rose, 599 stocks fell, and 219 remained unchanged.
In regional Asian stock markets this afternoon, the Nikkei index strengthened 1.11 per cent to 70,240.00, the Hang Seng index weakened 0.63 per cent to 22,881.02, the Shanghai index strengthened 0.50 per cent to 4,094.40, while the Strait Times index weakened 0.58 per cent to 5,178.42.