JCI closes weaker as investors shift towards safe-haven assets
The Indonesia Composite Index (JCI) on the Indonesia Stock Exchange (IDX) closed lower on Monday afternoon, triggered by market participants shifting towards defensive instruments or safer assets. The JCI fell by 124.08 points, or 1.85 per cent, to 6,599.24, while the LQ45 index of 45 blue-chip stocks dropped by 6.79 points, or 1.03 per cent, to 651.09.
“For this week, the JCI remains prone to volatile movement with a sideways-weakening tendency. Global sentiment will remain dominant, but opportunities for a technical rebound remain open if foreign selling pressure eases and big-cap banking stocks stabilise,” said capital market observer Reydi Octa when contacted in Jakarta on Monday.
Reydi explained that the JCI’s decline was triggered by a combination of global and domestic sentiments. Globally, the market remains overshadowed by a ‘risk-off’ sentiment due to uncertainty regarding US interest rate directions, geopolitical tensions, and pressure on emerging markets. Domestically, investors are closely monitoring capital outflows, the weakening Rupiah, and concerns regarding liquidity and volatility in certain stocks.
He further noted that foreign investors are currently adopting a defensive stance, particularly regarding the large-cap stocks that previously supported the index. Foreign investors appear to be more cautious while awaiting global market stability and certainty regarding monetary policy directions.
“Some funds are currently shifting towards more defensive instruments such as government bonds, gold, the US dollar, as well as dividend-based defensive stocks and commodities. Investors tend to seek safer assets,” Reydi added.
After opening lower, the JCI remained in negative territory through the end of the first trading session and stayed in the red until the market close. Based on the IDX-IC sectoral index, all eleven sectors weakened, with the transportation and logistics sector experiencing the deepest decline at 5.58 per cent, followed by the basic materials and industrial sectors, which fell by 5.30 per cent and 3.65 per cent, respectively.
Trading frequency was recorded at 2,570,311 transactions, with 32.02 billion shares traded worth Rp20.71 trillion. Among the stocks, DYAN, BLUE, BPTR, SMKL, and GSMF saw the largest gains, while DSSA, TPIA, APIC, KONI, and WBSA experienced the largest declines.
In the regional Asian markets, the Nikkei index fell by 662.29 points or 1.08 per cent to 60,747.00, the Shanghai index declined by 3.86 points or 0.09 per cent to 4,131.53, the Hang Seng index dropped by 287.55 points or 1.11 per cent to 25,675.18, and the Straits Times index rose by 8.67 points or 0.17 per cent to 4,997.75.