IHSG Plummets 6%, Worst Performance in Asia
Jakarta, CNBC Indonesia - Indonesia’s stock market has the worst performance in the Asian region. Throughout this week, the Composite Stock Price Index (IHSG) has plunged 6.61%.
The Composite Stock Price Index (IHSG) closed down 3.4% on Friday’s trading (24/4/2026). This weakening has caused the IHSG to slump for five consecutive days with a total decline of 6.61%. The latest closing also became the lowest since 7 April 2026.
What Caused the IHSG to Plummet?
- Adjustment of Outlook
Recent government policies focused on executing strategic programmes have implications for the risk posture in the financial sector. Credit rating agencies have taken anticipatory steps by adjusting the prospects or outlook for debt.
Agencies such as Fitch Ratings and Moody’s, along with several other financial institutions like major US banks (JP Morgan, Goldman Sachs), have rated Indonesia as being in an “underweight” position.
This downgrade in outlook has triggered caution among institutional investors, becoming an initial burden on market fundamentals before accumulating with other external sentiments.
- Massive Outflow in Financial Stocks
The correction experienced by the IHSG is inseparable from the persistent net selling actions by foreign investors. Throughout the year to date (YTD), the domestic stock market has recorded highly aggressive capital outflows from foreign funds.
It should be remembered that the IHSG has a very significant dependence on the movements of big-cap banking stocks, as they are the highest contributors to index points.
These funds have specifically been withdrawn from big-cap banking stocks that have long been the main support for IHSG liquidity.
The value of outflows in this crucial sector has even breached Rp35 trillion. Given the large weight of banking stocks on the index, selling pressure on this sector automatically drags the IHSG into the red zone.
- Rupiah Depreciation and Double Loss Threat
The weakening of the rupiah exchange rate against the US dollar has worsened the situation in the equity market. Currently, the rupiah exchange rate has depreciated and once reached Rp17,300 per US dollar.
Compared to its position at the beginning of 2026, which was still around Rp16,670/US$, the rupiah has weakened by 3.66% YTD.
For foreign investors, this domestic currency depreciation creates a double loss risk. They not only face potential asset value declines from falling stock prices but also exchange rate losses when converting their portfolios back to their home currency, thus triggering escalation.
- Extreme Reversal of Foreign Funds Direction
The severity of the index correction can be seen from how quickly foreign investor sentiment has reversed in recent months. Based on capital flow movement data as of 23 April 2026, the accumulated foreign net sell YTD has swelled to Rp40.86 trillion (with Rp20 trillion on 26 March 2026 transaction ownership changes) or a net of around Rp20.86 trillion.
This figure represents an extremely drastic change in position if compared to data on 15 January 2026, when the Indonesian stock market still recorded a net inflow of Rp7.30 trillion YTD.
This rapid shift from surplus to massive deficit indicates a total capital outflow movement from mid-January 2026 that has reached Rp28 trillion.
- Oil Price Surge and Interest Rate Direction
Beyond domestic dynamics, the financial market faces threats from global macroeconomic shifts. Currently, there is a risk of structural inflation triggered by energy supply disruptions, where global oil supply has halted by 20%.
Oil prices have already surged 48% since the Iran war. This price spike has raised concerns about rising inflation, making it difficult for US interest rates to fall.
Although inflation statistics may lag in reflecting the direct impact of this supply shock, the market has priced it in early.
With the potential for this inflation surge, the narrative of monetary policy easing or benchmark interest rate cuts becomes nearly impossible to realise.
On the contrary, the market is now recalculating the risk that central banks, both the Fed and Bank Indonesia, may pivot to tightening liquidity to maintain long-term economic stability.
In Indonesia, the oil price surge has already impacted the increase in non-subsidised fuel prices as of 18 April 2026.
- Middle East Escalation and Fragile Ceasefire
The external sentiment currently most dominating market fears is the sustainability of geopolitical tensions in the Middle East, which has also affected index performance to date.
Military escalation that began with attacks on important Iranian figures since 28 February 2026 has now developed into a capital war change for all global markets due to rising risk premiums for daily business operations.
Although there are pushes to extend the peace period, the current ceasefire status is considered very fragile and one-sided, especially amid struggles for control over the Strait of Hormuz. Based on the latest data, the US has declared control over the Strait of Hormuz amid the ongoing ceasefire.
This maritime route, which normally flows about 20% of the world’s oil supply, continues to face de facto pressure. The uncertainty of this military resolution drives global investors to continue accumulating safe haven assets and liquidating high-risk instruments (de-risking), ultimately worsening the capital outflow pressure on the IHSG.