Indonesia Retains Emerging Market Status, War Tensions Ease: Time for Rupiah and JCI to Rebound

Indonesia’s financial markets are expected to move positively today, Wednesday (24/6/2026), especially following MSCI’s announcement that it will retain Indonesia in the Emerging Market category. The Jakarta Composite Index (JCI) weakened in trading on Tuesday (23/6/2026), amid cautious market sentiment as participants awaited the MSCI announcement. At the close of the second session, the JCI fell 0.25%, or 15.36 points, to 6,101.33. During trading, the JCI was pressured deeper, touching a level of 5,993.04. Transaction value until the end of trading was relatively busy, reaching Rp32.94 trillion with a trading volume of 41.54 billion shares in 1.79 million transactions. In terms of stock movement, 282 stocks rose, 373 stocks fell, and 160 stocks were stagnant. The most actively traded issuers were PT Dian Swastatika Sentosa Tbk (DSSA), PT Chandra Asri Pacific Tbk (TPIA), PT Bank Central Asia Tbk (BBCA), PT Bank Rakyat Indonesia (Persero) Tbk (BBRI), and PT Bank Mandiri (Persero) Tbk (BMRI). The majority of trading sectors actually strengthened. However, heavy pressure from several sectors and large-cap stocks kept the JCI in the red zone. The deepest correction was recorded by the energy sector, which was pressured by 3.62%. Other sectors that weakened quite deeply were the financial and consumer sectors. Specifically, shares of PT Bayan Resources Tbk (BYAN), which entered the ex-date dividend period, were the main drag on the JCI, contributing 20.66 index points of weakness. Other issuers that weighed on the JCI’s performance included BBCA, BMRI, and PT Merdeka Copper Gold Tbk (MDKA). Turning to the exchange rate, pressure in the stock market was also in line with the rupiah’s weakening. The rupiah exchange rate again had to close Tuesday’s trading in the red zone against the US dollar. The weakening occurred amid the strengthening of the US dollar in the global market. Throughout trading, the rupiah moved in the range of Rp17,835-Rp17,870/US.TheGarudacurrencyopenedtradingatRp17, 850/US, then weakened deeper before the pressure eased towards the close. The rupiah’s weakening was still influenced by external sentiment, especially the dynamics of the US dollar’s strengthening in the global market. The greenback’s strengthening limited the room for appreciation of other countries’ currencies, including the rupiah. The US dollar strengthened amid lingering market concerns about the potential for higher-for-longer interest rates in the United States. This condition emerged after the US central bank (The Federal Reserve/The Fed) maintained its benchmark interest rate in the range of 3.50%-3.75%. In addition, the Fed’s latest interest rate projection, or dot plot, also indicated the possibility of high interest rates persisting longer. In fact, some Fed officials still estimate the potential for a rate hike at the next meeting. However, the US dollar’s strengthening was still restrained by positive developments in US-Iran negotiations. Hopes for peace between the two countries made pressure on risky assets slightly more limited, although market uncertainty has not fully subsided. From the bond market, the yield on 10-year Government Securities (SBN) rose to 7.218% in Tuesday’s trading. This increase marked the fourth consecutive trading day of rising 10-year SBN yields. US stock markets, known as Wall Street, closed lower in trading on Tuesday, or early Wednesday morning Indonesian time. Pressure mainly came from a sell-off in technology stocks, particularly those related to memory chips and artificial intelligence (AI). The S&P 500 index fell 1.44% to 7,365.46. The Nasdaq Composite, which contains many technology stocks, corrected deeper, by 2.21% to 25,587.04. Meanwhile, the Dow Jones Industrial Average (DJIA) fell 45.87 points, or 0.09%, to 51,666.84. The pressure on Wall Street was a continuation of the technology sector’s weakness in the previous trading session. On Monday, the Nasdaq had already fallen 1.3%, mainly due to pressure on Alphabet shares. The sell-off then spread to global markets, particularly Asia. South Korea’s Kospi index was one of the most pressured after memory chip-related stocks collapsed. Shares of SK Hynix, which had previously been the engine of the AI euphoria-based rally in South Korea, plunged more than 12%. This pressure caused the Kospi index to briefly fall nearly 10%. Yet, the South Korean benchmark index had still recorded a gain of about 95% so far this year. In Japan, the Nikkei 225 also fell 3.55%, snapping an eight-day winning streak. On Wall Street, the pressure on chip stocks was also clearly visible. Shares of Micron Technology, traded in the US, fell 13%. Sandisk also corrected 13%, while Seagate Technology weakened more than 5%. Other chip and semiconductor stocks were also pressured. Intel fell 6%, while Advanced Micro Devices (AMD) and Qualcomm weakened nearly 6% and 8%, respectively. The heavy pressure on the technology sector caused the State Street Technology Select Sector SPDR ETF (XLK) to fall 4%. Meanwhile, the VanEck Semiconductor ETF (SMH), which tracks semiconductor stocks, fell 7%. However, the pressure on Wall Street’s main indices briefly eased from their lowest levels. This occurred because some technology stocks outside the chip sector, such as Microsoft and Amazon, were still able to strengthen. Defensive stocks also helped restrain deeper pressure. Walmart, Procter & Gamble, and Johnson & Johnson strengthened, while shares of International Business Machines (IBM) surged 5% after receiving a recommendation upgrade to overweight from JPMorgan. Shares of Sherwin-Williams and Merck also rose. Alphabet shares continued their weakening, falling 1% in Tuesday’s trading. Previously, the Google parent company’s stock had fallen 5% on Monday due to market concerns over the departure of several key AI talents from the company.