Jakarta Composite Index plunges as Fitch negative outlook and global conflicts weigh on sentiment

Jakarta, 4 March 2026 — The Jakarta Composite Index (JCI) on the Indonesia Stock Exchange (IDX) closed lower, tumbling 362.70 points or 4.57 percent to 7,577.06. The decline was driven by dual sentiments weighing on the equity market: escalating geopolitical tensions in West Asia and Fitch Ratings’ revision of Indonesia’s credit outlook to negative. Fitch sovereign rating remains at BBB (investment grade), but the outlook change sends a warning signal to the market and prompted heavy selling by foreign investors.

Muhammad Wafi, Head of Research at PT Korea Investment and Sekuritas Indonesia (KISI), said the impact of the rating revision includes higher funding costs for the state, deterioration of the rupiah, and aggressive foreign selling in the large-cap banks sector.

Beyond domestic factors, the global market environment is also risk-off. The Middle East tensions, particularly Iran’s threat to close the Strait of Hormuz, raise fears of disruption to global oil supply. A spike in crude prices could push inflation higher globally, prompting central banks to maintain tight monetary policy for longer. In this uncertain climate, investors tend to move funds from developing markets into safe-haven assets such as gold and the U.S. dollar.

Based on the IDX-IC sectoral index data, all eleven sectors on the IDX closed in the red. The weakness also aligns with broader regional markets, with Japan’s Nikkei down 3.61 percent to 58,057.19, followed by notable declines in Hong Kong’s Hang Seng and Singapore’s Straits Times.

The rupiah weakened to 16,892 per USD amid the Iran conflict escalation and Fitch’s negative outlook.