IHSG likely to be volatile amid 'wait and see' stance on domestic economic data

The Indonesia Stock Exchange (IDX) Composite Index (IHSG) is likely to move in a volatile manner on Wednesday as market players adopt a wait-and-see approach towards domestic economic data. The IHSG opened down 2.58 points, or 0.05 percent, at 5,640.61. Meanwhile, the LQ45 index of 45 leading stocks fell 0.62 points, or 0.11 percent, to 552.49. Lotus Andalan Sekuritas’ research team noted that the IHSG’s movement will remain potentially volatile as the market awaits clarity on global interest rate direction, developments regarding the potential MSCI market classification downgrade, and the ability of domestic data to demonstrate economic resilience. Domestically, sentiment will be heavily influenced by a series of important economic data, including June 2026 inflation figures, Indonesia’s Manufacturing PMI data, and the May 2026 trade balance. If inflation and trade balance data exceed expectations and global sentiment remains conducive, the opportunity for IHSG strengthening at the start of the second half of 2026 remains open. The consensus projects inflation to rise to around 3.2 percent year-on-year (yoy) due to increases in food prices and non-subsidised fuel, while the trade surplus is forecast to widen to around 4 billion US dollars. The phased implementation of the B50 programme starting 1 July 2026 is a positive sentiment for the energy and crude palm oil (CPO) sectors. From overseas, the US Dollar Index (DXY) strengthened to 101.26 after JOLTS data showed job openings reached 7.594 million, reinforcing expectations that the US Federal Reserve will maintain higher interest rates for longer. Global sentiment will also be influenced by the uncertain progress of US-Iran peace negotiations, although oil prices remain weak. Investor focus is also on manufacturing data, specifically China’s Caixin Manufacturing PMI and the US ISM Manufacturing PMI, as well as a speech by Federal Reserve Governor Kevin Warsh at a European Central Bank (ECB) forum in Sintra, Portugal, which could provide clues on interest rate policy direction. Manufacturing data and Fed officials’ comments will be the main catalysts for US dollar movements, bond yields, and global capital flows. On Tuesday, European bourses closed higher, with the Euro Stoxx 50 up 1.51 percent, the UK’s FTSE 100 down 0.12 percent, Germany’s DAX up 1.50 percent, and France’s CAC 40 up 0.44 percent. Wall Street also closed higher, with the Dow Jones Industrial Average up 0.26 percent, the S&P 500 up 0.79 percent, and the Nasdaq Composite up 1.68 percent. In Asian regional markets this morning, the Nikkei index rose 0.69 percent to 70,548.00, the Shanghai index gained 0.23 percent to 4,103.00, the Hang Seng fell 1.39 percent to 22,757.00, and the Strait Times index slipped 0.06 percent to 5,167.00.