IHSG Surges 2.75%, Fiscal Sentiment and Foreign Funds Provide Support
The Composite Stock Price Index (IHSG) recorded a significant strengthening of 2.75% to the level of 7,302, driven by a combination of positive domestic fiscal sentiment and inflows of foreign funds.
Capital market analyst and founder of Republik Investor, Hendra Wardana, revealed that the majority strengthening of Asian stock exchanges served as a positive catalyst, supplemented by the continued entry of foreign funds, albeit in amounts that are not yet substantial.
From the domestic side, discussions on trimming the free nutritious meal (MBG) budget have become a positive sentiment for the market, as it signals that the government remains committed to fiscal discipline, thereby somewhat alleviating concerns over the widening state budget deficit.
“For investors, fiscal stability is crucial because it will maintain rupiah stability, bond yields, and keep Indonesia’s credit rating stable, ultimately supporting the investment climate in the stock market,” Hendra stated in an official remark on Thursday (26/4).
Nevertheless, amid the IHSG’s strengthening, Hendra noted that the rupiah exchange rate, still hovering around Rp16,900 per US dollar, indicates that external pressures have not fully dissipated.
The rise in gold prices and the decline in global oil prices also reflect that global markets remain in a risk-on phase that is not yet fully robust, making foreign fund flows to emerging markets like Indonesia tend to be selective.
“Therefore, IHSG movements in the short term will still be heavily influenced by foreign fund flows and the rupiah exchange rate,” he explained.
For tomorrow’s trading, technically, the IHSG has the potential to continue strengthening and test the MA10 area around 7,339 as well as the psychological resistance at the 7,400 level.
If the IHSG can break through that area with increased volume, there is a chance for the IHSG to move towards the 7,450–7,500 area in the short term. However, if it fails to breach 7,400, the IHSG could consolidate first in the 7,200–7,400 range.
Overall, Hendra assesses that the strategy investors can use in the current market conditions is to trade stocks that are experiencing foreign accumulation and have upward momentum, because in a market still influenced by global sentiment, stocks with high liquidity and sectoral catalysts are usually the primary choices for investors, especially foreign and institutional investors.