IHSG Rebound Reflects Technical Recovery After Sharp Correction

Researcher from the Center of Reform on Economics (CoRE) Indonesia, Yusuf Rendy Manilet, has highlighted that the recent strengthening of the Indonesia Stock Exchange Composite Index (IHSG) primarily reflects a technical recovery after a sharp correction. He noted that the strong rebound occurred following discussions of state-owned enterprise share buybacks and various market stabilisation policies. However, he cautioned that the rise came after a very deep correction, meaning most of the strengthening can be interpreted as a technical recovery from oversold conditions rather than the start of a long-term uptrend fully supported by fundamentals. Yusuf further assessed that buyback policies have limitations in supporting the capital market over the long term. He pointed out that foreign capital flows remain a key indicator to watch, as they continue to show a tendency to exit the domestic market. Up to mid-2026, foreign investors have still recorded significant net selling, meaning the IHSG’s strengthening has been largely supported by domestic investors and liquidity rotation in large-cap stocks. This indicates that global investor confidence has not yet fully recovered. Nevertheless, the easing of geopolitical tensions in the Middle East has had a positive impact on the Indonesian economy. Hopes for a peace agreement between the US and Iran have reduced market concerns over global energy supply disruptions, leading to a correction in world oil prices. For Indonesia, which remains a net energy importer, lower oil prices help ease inflationary pressures and improve the external balance outlook, although this factor remains beyond domestic control and could change if the geopolitical situation deteriorates again.