IHSG Predicted to Move Sideways Amid Wait-and-See on BI Policy

The Jakarta Composite Index (IHSG) on the Indonesia Stock Exchange (BEI) is expected to move sideways on Wednesday as market participants adopt a wait-and-see stance ahead of Bank Indonesia’s (BI) monetary policy announcement. The IHSG opened up 25.99 points, or 0.41 percent, at 6,366.01. Meanwhile, the LQ45 index of 45 leading stocks rose 1.77 points, or 0.28 percent, to 638.41. “The IHSG has the opportunity to test resistance at 6,377. If it breaks through, the strengthening could continue towards 6,398-6,459. Conversely, if it fails to breach 6,377, the IHSG could experience profit-taking with support areas at 6,286-6,257,” said Kiwoom Sekuritas Indonesia Head of Research Liza Camelia Suryanata in a study in Jakarta on Wednesday. Domestically, Bank Indonesia will announce its monetary policy direction today following its Board of Governors meeting. The current BI-Rate stands at 5.75 percent, having been raised by a total of 100 basis points in three increments throughout 2026. Observers and economists are divided, with some projecting BI will hold the rate and others forecasting a 25-basis-point hike to 6.00 percent. On another front, the House of Representatives and the government are continuing to finalise the establishment of the Indonesia International Financial Centre (PFII), which is targeted to become a global financial hub and attract international family office funds. According to the study, approximately 3.2 trillion US dollars in assets are managed by family offices worldwide, with an estimated 65 percent seeking new investment locations due to geopolitical shifts and rising uncertainty in traditional financial centres. “By providing a competitive financial ecosystem, supportive regulations, and supporting infrastructure, the PFII is expected to increase foreign capital inflows and strengthen Indonesia’s position as a regional investment centre,” Liza said. From the global front, Liza noted that market sentiment is leaning positive, driven by a continued rebound in semiconductor stocks after they previously entered a bear market phase due to profit-taking on the artificial intelligence theme. Investors are now shifting focus to the second-quarter 2026 earnings season, with reports from Alphabet, Intel, and Texas Instruments seen as key catalysts for gauging AI spending prospects and the sustainability of the technology sector’s growth. Although the long-term outlook for AI remains strong, the market is closely monitoring high capital expenditure by major technology firms and the potential return on these investments. In the absence of major economic data and with the Federal Reserve in a communications blackout period, market movements are being influenced more by corporate earnings reports. Meanwhile, geopolitical tensions are escalating again as the conflict between the United States and Iran intensifies. The US has continued strikes on Iran for the tenth consecutive day, while Iran retaliated by attacking oil tankers in the Strait of Hormuz and US military bases in the region. Additionally, Iran-backed Houthi groups announced a maritime embargo against Saudi Arabia, heightening the risk of disruption to global energy supplies. The administration of US President Donald Trump also increased global trade tensions by imposing an additional 50 percent tariff on a range of Canadian imports, from wine to cement. The policy has reignited concerns over trade relations between the two countries, although Trump stressed the move was not a response to wildfires in Canada but rather related to Canada’s treatment of US agriculture and businesses. On Tuesday, European stock markets closed higher, with the Euro Stoxx 50 up 0.90 percent, the UK’s FTSE 100 up 0.58 percent, Germany’s DAX up 0.66 percent, and France’s CAC 40 up 0.28 percent. Wall Street also closed higher on Tuesday, with the S&P 500 up 0.90 percent to 7,507.32, the Nasdaq Composite up 1.3 percent to 25,837.21, and the Dow Jones Industrial Average up 0.70 percent to 52,223.93. In regional markets this morning, the Nikkei index rose 1.67 percent to 67,396.00, the Shanghai index gained 0.40 percent to 3,881.72, the Kospi surged 5.22 percent to 7,100.54, and the Strait Times index fell 0.46 percent to 5,501.52.