IHSG Potentially Volatile, Driven by Domestic and Global Sentiment

The Jakarta Composite Index (IHSG) on Thursday was expected to move in a volatile pattern, driven by sentiment from domestic and global sources. The IHSG opened up by 47.99 points, or 0.76%, at 6,366.49. Meanwhile, the 45-share leading group, or the LQ45 Index, rose by 4.28 points, or 0.68%, to 634.96. ‘The IHSG is expected to remain volatile in the short term,’ the Lotus Andalan Sekuritas Research Team said in its Jakarta briefing on Thursday. Domestically, in yesterday’s trading, the IHSG briefly rebound ahead of President Prabowo Subianto’s address to the DPR, but sentiment turned negative following government statements regarding the plan for a one-stop export governance for strategic commodities via export state-owned enterprises. On the macro side, Bank Indonesia (BI) through the Board of Governors Meeting (RDG) unexpectedly raised the BI Rate by 50 basis points to 5.25 percent, as a step to stabilise the rupiah amid external pressures and rising global volatility due to Middle East geopolitical tensions. The policy successfully strengthened the rupiah, but the rate hike also raised concerns about a slowdown in domestic economic growth and the cost of funding for corporations. From abroad, oil prices fell by more than 5 percent after U.S. President Donald Trump’s statements regarding progress in talks with Iran, triggering hopes of easing geopolitical risks in the Middle East and potentially reducing global inflationary pressures.