IHSG Predicted to Remain Volatile Ahead of Eid, 4 Shares Under Analyst Scrutiny
JAKARTA — Indonesia’s stock market movements are expected to remain volatile in the lead-up to the extended Eid 2026 holiday period. This situation requires investors to be more selective when choosing shares for short-term trading.
Capital market analyst and founder of Investor Republic Hendra Wardana stated that the Composite Stock Price Index (IHSG) heading into Eid is influenced not only by global factors such as crude oil prices and the direction of interest rate policy, but also by unique domestic dynamics. The public’s liquidity needs typically increase in the run-up to Eid.
“Historically, this phenomenon can indeed place additional pressure on the market, particularly because retail investors represent one of the more active liquidity contributors in the domestic stock market,” Hendra said when contacted by Kompas.com on Sunday evening (15 March 2026).
However, the impact of public cash requirements on the IHSG is not always dominant. Indonesia’s stock market structure remains dominated by large institutional investor transactions. Domestic and foreign institutional investors hold a far greater share of trading volume compared to retail investors. This situation means that index movements are determined largely by major investors.
Pressure from retail selling typically manifests more in second and third-tier shares. Shares in these categories have lower liquidity. Large-capitalisation shares tend to be more stable, as their liquidity remains dominated by institutional investor transactions.
“The factor of public cash needs can indeed amplify short-term volatility, but its contribution to IHSG declines is usually only an additional sentiment that reinforces existing market pressure,” he explained.
The surge was triggered by rising geopolitical tensions in the Middle East. The market began to worry about the potential for a spike in energy inflation. Rising energy prices sparked new expectations regarding global monetary policy. The market began to anticipate that world central banks would delay easing interest rate policy.
Expectations regarding the US Federal Reserve’s policy shifted as well. Previously, the market anticipated that interest rate cuts would proceed quite aggressively this year. Those expectations have now begun to diminish. This situation has made global capital flows more cautious towards risky assets. Shares in developing country markets are also affected. Indonesia’s stock market falls into this category.