IHSG weakens as investors await BI-Rate decision and MSCI release

The Indonesian Composite Index (IHSG) on the Indonesia Stock Exchange (BEI) moved lower on Thursday amid market participants’ wait-and-see stance regarding Bank Indonesia’s (BI) benchmark interest rate policy and an announcement from global index provider MSCI. The IHSG opened down 28.85 points, or 0.46 percent, at 6,191.89. Meanwhile, the LQ45 index of 45 leading stocks fell 5.28 points, or 0.84 percent, to 619.95. “The IHSG is expected to move sideways with a tendency to weaken in the range of 6,100-6,350,” said Phintraco Sekuritas Head of Research Ratna Lim in her analysis in Jakarta on Thursday. Domestically, investors tend to be cautious ahead of several upcoming events, namely awaiting the results of Bank Indonesia’s Board of Governors Meeting today, Thursday (18/6). Additionally, investors are anticipating the MSCI Global Market Accessibility Review on Friday (19/6), the FTSE index rebalancing on Friday (19/6), and the MSCI Annual Market Classification Review on Wednesday (24/6) next week. From abroad, in line with market expectations, the US central bank, The Fed, maintained its benchmark interest rate at 3.5-3.75 percent. However, several Fed officials expect interest rates to rise in 2026. The median interest rate forecast currently stands at 3.8 percent for year-end, up from 3.4 percent in the March 2026 projection, indicating that the committee sees at least one rate hike as necessary in 2026. On the other hand, increasing uncertainty was driven by Fed Chairman Kevin Warsh stating he abstained from the projection, although his comments tended to prioritise price stability, thus indicating the Fed will be more hawkish. The market responded to this with a sharp rise in the yield on 2-year US government bonds, up 16 bps to 4.216 percent. Meanwhile, inflation in the UK remained at 2.8 percent year-on-year in May 2026, below the estimate of 3 percent, reinforcing expectations that the Bank of England will still hold interest rates at 3.75 percent. In trading on Wednesday (17/06), European stock markets strengthened, with the Euro Stoxx 50 up 0.80 percent, the UK’s FTSE 100 up 0.14 percent, Germany’s DAX up 0.10 percent, and France’s CAC 40 up 0.20 percent. Meanwhile, US Wall Street markets fell on Wednesday (17/06), with the Dow Jones Industrial Average down 0.98 percent, the S&P 500 down 1.21 percent, and the Nasdaq Composite down 0.99 percent. Regional Asian stock markets this morning saw the Nikkei index rise 1.38 percent to 70,869.00, the Shanghai index fall 0.31 percent to 4,094.31, the Hang Seng index fall 1.78 percent to 23,827.90, and the Strait Times index rise 0.14 percent to 5,184.78.