IHSG Strengthens on Positive Response to S&P Global Maintaining Indonesia's Rating
The Indonesia Stock Exchange (BEI) composite index (IHSG) closed higher on Monday afternoon as investors responded positively to S&P Global Ratings maintaining Indonesia’s sovereign debt rating at ‘BBB’ with a stable outlook. The IHSG closed up 113.48 points, or 1.92 percent, at 6,037.84. Meanwhile, the LQ45 index of 45 leading stocks rose 13.12 points, or 2.23 percent, to 602.37.
Phintraco Sekuritas Head of Research Ratna Lim stated that positive sentiment stemmed from S&P Global Ratings affirming Indonesia’s long-term credit rating at ‘BBB’ and short-term rating at ‘A-2’, with the long-term outlook maintained at ‘Stable’. The market responded positively, having previously feared a potential downgrade to Indonesia’s rating or outlook.
Domestically, S&P Global Ratings assessed the weakening of Indonesia’s fiscal and external positions as temporary, with potential for improvement alongside rising commodity prices and government efforts to boost state revenue. The stable outlook reflects expectations that state revenue will continue to recover this year and export earnings will increase as commodity prices strengthen. S&P expects the government to maintain the state budget deficit limit of three percent of gross domestic product (GDP) as the main fiscal policy anchor.
The global rating agency also projected Indonesia’s economy could still grow 5.1 percent in 2026, before recording average growth of 4.9 percent per year throughout 2026–2029. This outlook is supported by fiscal spending, downstreaming programmes, and improved management of the natural resources sector.
From abroad, market sentiment was influenced by rising tensions in the Middle East, with higher oil prices keeping inflationary pressures and interest rate hike expectations in focus. The tensions follow new United States strikes against Iran, with uncertainty over the status of the Strait of Hormuz keeping markets on edge. Meanwhile, market participants await US inflation data this week for further clues on the Federal Reserve’s monetary policy outlook. Markets currently expect the Fed to raise interest rates once before the end of the year. Minutes from the Fed’s June 2026 meeting showed some policymakers saw grounds for a rate hike, although they ultimately supported keeping policy unchanged. Fed Chair Kevin Warsh is scheduled to appear before Congress for the first time on Tuesday and Wednesday this week.
The IHSG opened higher and remained in positive territory until the close of the first trading session. In the second session, the IHSG stayed in the green until the close of trading. Based on the IDX-IC sectoral indices, nine sectors strengthened, led by the energy sector which rose 2.50 percent, followed by the basic materials and industrial sectors which gained 2.41 percent and 1.79 percent respectively. Two sectors weakened, with healthcare falling the most by 0.40 percent, followed by the consumer non-cyclicals sector which declined 0.15 percent.
Stocks recording the largest price gains included BKDP, LAND, VKTR, PRDL, and ATAP. Meanwhile, stocks experiencing the largest price declines were BAPA, JELI, RBMS, RANS, and GRPM. Trading frequency was recorded at 2,676,000 transactions, with a total of 25.10 billion shares traded worth Rp12.14 trillion. A total of 392 stocks advanced, 268 declined, and 305 were unchanged.
Regional Asian stock markets in the afternoon saw the Nikkei index weaken 1.76 percent to 67,350.00, the Shanghai index fall 2.06 percent to 3,913.79, the Hang Seng index strengthen 0.16 percent to 24,213.72, and the Strait Times index edge up 0.02 percent to 5,470.54.