IHSG Opens Weaker by 0.3 Per Cent
The Composite Stock Price Index (IHSG) on Monday, 16 March 2026, weakened amid expectations of tight monetary policy implementation resulting from escalating conflict between the United States and Iran.
The IHSG opened weaker by 21.76 points or 0.30 per cent to 7,115.45. Meanwhile, the 45 leading shares group or LQ45 index fell 3.38 points or 0.46 per cent to 724.95.
“Kiwoom Research continues to recommend adopting a wait-and-see stance, holding more cash to anticipate global volatility whilst the IDX is not operating (Eid holiday break),” said Head of Research at Kiwoom Sekuritas Indonesia Liza Camelia Suryanata in her analysis in Jakarta on Monday.
From overseas, market participants’ focus this week is on the Federal Reserve’s FOMC meeting on 17-18 March 2026, which will release the latest economic projections and signal the direction of interest rates amid surging energy prices due to Middle Eastern conflict.
Rising energy prices have begun to shift global monetary policy expectations, with markets estimating fewer than one Federal Reserve interest rate cut by year-end, down from the previous expectation of two cuts before the war erupted.
Additionally, US economic data shows a combination of slowing growth and persistent inflation. Fourth-quarter 2025 US GDP was revised down to 0.7 per cent, whilst January core PCE rose 3.1 per cent, far above the Federal Reserve’s 2 per cent inflation target.
“This condition increases the risk that the central bank will maintain higher interest rates for longer,” said Liza.
On the other hand, market participants continue to monitor developments in the Iran-US war, including potential further attacks on energy facilities and efforts to reopen the Strait of Hormuz shipping corridor.
Attention is also focused on the possible Israel-Lebanon talks regarding Hezbollah ceasefire negotiations.
Meanwhile, China-US economic relations are highlighted through discussions of the Board of Trade and Board of Investment mechanisms ahead of planned talks between US President Donald Trump and Chinese President Xi Jinping.
US and Chinese economic officials held talks in Paris discussing increased trade in agricultural, energy, and critical mineral sectors ahead of the planned Trump-Xi Jinping meeting at the end of March 2026.
US allies in the Asia-Pacific region agreed on approximately US$57 billion in energy investments through 22 agreements with US companies at the Indo-Pacific Energy Security Forum in Tokyo.
This agreement reflects US efforts to strengthen ally energy security and increase global supply amid disruptions from the Iran war and Strait of Hormuz closure. Japan has also expressed interest in increasing US oil purchases.
Domestically, the government reaffirmed that the Agreement on Reciprocal Trade (ART) with the US remains the basis of bilateral trade relations amid ongoing US trade investigations, described as part of internal administrative legal procedures.
The government ensured it would follow this process while continuing to communicate with US authorities and proceeding with domestic implementation of the ART including consultations with parliament and ratification stages.
Regional Asian stock exchanges this morning, amongst others, saw the Nikkei index fall 705.00 points or 1.31 per cent to 53,114.60, Shanghai index fall 38.75 points or 0.95 per cent to 4,056.70, Hang Seng index rise 61.34 points or 0.24 per cent to 25,256.94, and Strait Times index rise 1.34 points or 0.03 per cent to 4,843.70.