IHSG Predicted to Move Sideways Amid Wait-and-See on BI Policy
Jakarta (ANTARA) - The Indonesia Stock Exchange’s Composite Index (IHSG) is likely to move sideways on Wednesday as market participants adopt a wait-and-see stance towards Bank Indonesia’s monetary policy direction.
The IHSG opened 25.99 points, or 0.41 per cent, higher at 6,366.01. Meanwhile, the group of 45 leading stocks, or the LQ45 Index, rose 1.77 points, or 0.28 per cent, to 638.41.
“The IHSG has the opportunity to test resistance at 6,377. If successfully breached, the gains could continue towards 6,398-6,459. Conversely, if it fails to break through 6,377, the IHSG could see profit-taking with support areas at 6,286-6,257,” said Liza Camelia Suryanata, Head of Research at Kiwoom Sekuritas Indonesia, in her research note in Jakarta on Wednesday.
Domestically, Bank Indonesia (BI) will announce its monetary policy direction through its Board of Governors Meeting today, with the BI-Rate currently at 5.75 per cent, having been raised three times by a total of 100 basis points (bps) throughout 2026.
Observers and economists are split into two camps: some project that BI will maintain the BI-Rate, whilst others project a 25 basis point increase to 6.00 per cent.
Meanwhile, the House of Representatives and the government continue 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 fund flows.
According to the research, approximately US$3.2 trillion in assets are managed by family offices worldwide, with around 65 per cent of them estimated to be seeking new investment locations due to geopolitical shifts and rising uncertainty in traditional financial centres.
“Through the provision of a competitive financial ecosystem, supportive regulation, and supporting infrastructure, the PFII is expected to boost foreign capital inflows and strengthen Indonesia’s position as a regional investment hub,” said Liza.
Internationally, Liza explained that market sentiment is tending positive, driven by the continued rebound in semiconductor shares after previously entering a bear market phase due to profit-taking on the artificial intelligence (AI) theme.
Investors are now shifting their focus to the second quarter of 2026 financial reporting season, with results from Alphabet, Intel, and Texas Instruments seen as the main catalysts for gauging AI spending prospects and the sustainability of the technology sector’s growth.
Although the long-term outlook for AI is still considered strong, the market continues to monitor the high capital expenditure of major technology companies and the potential return on such investments.
“On the other hand, the scarcity of economic data and The Fed’s communications blackout period mean market movements are more influenced by corporate financial reports,” said Liza.
Meanwhile, geopolitical tensions are rising again as the conflict between the United States and Iran continues to escalate. The US continued its attacks on Iran for the tenth consecutive day, whilst Iran retaliated by striking tankers in the Strait of Hormuz and US military bases in the region.
In addition, the Iran-backed Houthi group announced a maritime embargo against Saudi Arabia, increasing the risk of disruption to global energy supplies through the Red Sea.
The administration of US President Donald Trump has once again raised global trade tensions by imposing an additional 50 per cent tariff on a number of imported products from Canada, ranging from wine to cement.
“This policy has reignited concerns over trade relations between the two countries, although Trump asserted the move is not a response to the wildfires in Canada, but rather relates to Canada’s treatment of the agricultural sector and US businesses,” said Liza.
In Tuesday’s trading (21 July), European markets closed uniformly higher, with the Euro Stoxx 50 up 0.90 per cent, the UK’s FTSE 100 up 0.58 per cent, Germany’s DAX up 0.66 per cent, and France’s CAC 40 up 0.28 per cent.
Wall Street also closed uniformly higher on Tuesday (21 July), with the S&P 500 up 0.90 per cent to 7,507.32, the Nasdaq Composite up 1.3 per cent to 25,837.21, and the Dow Jones Industrial Average up 0.70 per cent to 52,223.93.
In regional Asian markets this morning, Japan’s Nikkei rose 1.67 per cent to 67,396.00, the Shanghai index gained 0.40 per cent to 3,881.72, South Korea’s Kospi surged 5.22 per cent to 7,100.54, and the Straits Times index fell 0.46 per cent to 5,501.12.