IHSG Plunges Below 6,900 Level; Here Are the Triggers
The Indonesian Composite Index (IHSG) on the Indonesia Stock Exchange (IDX) moved weakly on Monday amid expectations of tightened monetary policy following escalation of the conflict between the United States and Iran. The IHSG opened down 21.76 points, or 0.30 per cent, to 7,115.45. Meanwhile, the LQ45 blue-chip index fell 3.38 points, or 0.46 per cent, to 724.95.
Selling pressure intensified, with the IHSG eventually plummeting to pierce the 6,933 level.
“Kiwoom Research continues to recommend a more cautious wait-and-see stance, holding more cash in anticipation of global volatility whilst the IDX remains closed during the Eid holiday,” said Head of Research at Kiwoom Securities Indonesia Liza Camelia Suryanata in her analysis in Jakarta on Monday (16 March 2026).
Internationally, market participants are focused this week on the Federal Open Market Committee (FOMC) meeting on 17–18 March 2026, which will release updated economic projections and signal the direction of interest rates amid surging energy prices caused by Middle East tensions.
Rising energy prices are beginning to reshape global monetary policy expectations. Markets now estimate fewer than one rate cut from the Federal Reserve by year-end, down from expectations of two cuts before the conflict erupted.
Additionally, US economic data reveals a combination of slowing growth and persistently high inflation. US fourth-quarter 2025 GDP was revised downwards to 0.7 per cent, whilst January’s core personal consumption expenditures (PCE) rose 3.1 per cent, well above the Federal Reserve’s 2 per cent inflation target.
“These conditions increase the risk that central banks will maintain elevated rates for longer,” said Liza.
Market participants continue to monitor developments in the Iran-US conflict, including potential further attacks on energy facilities and efforts to reopen shipping through the Strait of Hormuz.
Attention is also focused on potential Israel-Lebanon talks regarding a Hezbollah ceasefire.
Meanwhile, US-China economic relations are in focus 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 expanded trade in agriculture, energy, and critical minerals ahead of the planned Trump-Xi meeting at the end of March 2026.
US allies in the Asia-Pacific region agreed on approximately $57 billion in energy investment through 22 agreements with US companies at the Indo-Pacific Energy Security Forum in Tokyo.
The agreements reflect US efforts to strengthen allies’ energy security and boost global supplies amid supply disruptions from the Iran conflict and Strait of Hormuz closure. Japan also expressed interest in increasing purchases of US oil.
Domestically, the government reaffirmed that the Agreement on Reciprocal Trade (ART) with the US remains the basis of bilateral trade relations amid an ongoing US trade investigation, described as part of internal administrative legal mechanisms.
The government assured it will follow the process whilst continuing to communicate with US authorities and continuing domestic implementation of the ART, including consultations with parliament and ratification procedures.
During Friday’s trading (13 March 2026), European stock exchanges declined across the board, with Euro Stoxx 50 down 0.56 per cent, the UK FTSE 100 down 0.42 per cent, Germany’s DAX down 0.60 per cent, and France’s CAC down 0.91 per cent.
Wall Street also fell uniformly on Friday (13 March 2026), with the S&P 500 down 0.6 per cent to 6,632, the Nasdaq down 0.9 per cent to 22,105, and the Dow Jones down 0.3 per cent to 46,559.
Asian regional stock indices this morning included the Nikkei falling 705.00 points, or 1.31 per cent, to 53,114.60, the Shanghai index falling 38.75 points, or 0.95 per cent, to 4,056.70, the Hang Seng rising 61.34 points, or 0.24 per cent, to 25,263.94, and the Straits Times rising 1.34 points, or 0.03 per cent, to 4,843.70.