IHSG falls 4 per cent as investors shift to gold and the dollar
Jakarta (ANTARA) — Market observer Reydi Octa said global investors tend to shift part of their funds into safe-haven assets such as gold, the US dollar, and US government bonds, while awaiting a de-escalation in tensions between Iran, the US and Israel.
Trade data for Session I on Wednesday showed the Jakarta Composite Index (IHSG) closed down 343.19 points or 4.32% at 7,596.58, in line with the weakness of regional stock markets.
“When Asian stock markets are weakening, global investors typically shift a portion of their funds into safe-haven assets such as gold, US government bonds, and the US dollar, while awaiting clarity on the direction of global sentiment and a easing of geopolitical tensions,” Reydi said when contacted by ANTARA in Jakarta on Wednesday.
Reydi explained that the IHSG’s weakness was driven by a combination of external sentiment and profit-taking by investors after a rally in recent days.
From overseas, he said market participants remain haunted by geopolitical tensions and concerns about the direction of global interest rates that have not yet fully subsided, triggering a risk-off stance in many Asian exchanges.
He disclosed that foreign investors tend to conduct net sells, especially in large-cap stocks (big caps).
“The main driver is portfolio rotation into safer assets and global portfolio rebalancing amid market volatility,” Reydi said.
For today’s trading, he projected that the IHSG would likely move volatile but still have a chance to hold at the 7,600-7,500 support area.
“If foreign selling pressure is not too aggressive, the downturn is likely to be technical and limited,” Reydi said.
Trading data on Wednesday at 12:00 WIB shows regional Asian stock markets, including the Nikkei which fell 2,178.10 points or 3.87% to 54,101.00, the Shanghai Composite down 58.33 points or 1.41% to 4,064.35, and the KOSPI down 542.93 points or 9.37% to 5,248.98.
Then the Hang Seng fell 692.58 points or 2.69% to 25,075.49; the Kuala Lumpur Index fell 9.56 points or 0.56% to 1,702.39; and the Straits Times Index fell 120.50 points or 2.44% to 4,796.14.