IHSG Opens 1% Higher, Buoyed by MSCI Decision and Global Sentiment

The Jakarta Composite Index (IHSG) opened stronger on Thursday’s trading, continuing positive sentiment from global markets amid easing geopolitical concerns and market optimism towards economic prospects. Based on trading data up to 09.18 WIB, the IHSG stood at 5,949.22, up 65.34 points or 1.11% compared to the previous close of 5,883.88. Since the start of trading, the IHSG opened at 5,873.07 and briefly fell to 5,864 before moving into positive territory. Transaction activity also began to pick up. The transaction value reached Rp1.88 trillion with a trading volume of 3.15 billion shares traded 235,000 times. The majority of stocks moved higher, with 403 stocks rising, 167 stocks falling, and 389 stocks stagnant. Entering Thursday’s trading, the IHSG’s movement is expected to still be influenced by sentiment from the MSCI review results, which maintained Indonesia in the Emerging Market classification. The decision eased market concerns over the potential for large-scale foreign fund outflows had Indonesia’s status been downgraded to Frontier Market. However, MSCI still provided notes regarding share ownership transparency, allegations of coordinated trading, and the effectiveness of capital market reform implementation, which will be re-evaluated in November 2026. Domestically, the Financial Services Authority (OJK) and the government assessed that the MSCI decision reflects continued strong confidence from global investors in Indonesia’s financial markets. The OJK affirmed it will continue reforms to strengthen market integrity and transparency, while the government considers MSCI’s continued evaluation a normal process. Externally, investor attention is shifting to the release of the US Personal Consumption Expenditures (PCE) inflation data, which serves as the Federal Reserve’s main reference in determining the direction of interest rate policy. If PCE inflation shows another increase, expectations for higher-for-longer interest rates could strengthen, driving a stronger US dollar and higher Treasury yields, potentially triggering pressure on risky assets including the IHSG and the rupiah. Additionally, the market is also awaiting weekly US jobless claims data to read the latest conditions of the labour market. A combination of persistently high inflation and a solid labour market could reinforce the view that the Fed has no room to cut interest rates soon. Amid these sentiments, the US dollar index, which has breached the 101.609 level, remains a factor limiting the strengthening of the rupiah and the domestic stock market, along with increasing pressure on capital flows to developing countries.