JCI drops 4 per cent, stock analysts cite rupiah weakness as primary burden

The movement of the Jakarta Composite Index (JCI) has been weighed down by conglomerate-linked issuers that have seen significant fluctuations over the past two days. Herditya Wicaksana, a stock analyst from MNC Sekuritas, stated that the weakening exchange rate of the rupiah against the US dollar has become the primary sentiment driving the significant decline in the JCI.

The JCI fell by 255.71 points, or 4.13 per cent, to the 5,939.71 level during trading at 11:10 WIB at the Indonesia Stock Exchange (IDX) on Wednesday. “We estimate that the current correction in the JCI is caused by the weakening of the rupiah exchange rate against the US dollar, which has now reached Rp17,928 per US dollar,” said Didit when contacted by Antara in Jakarta on Wednesday.

Furthermore, Didit explained that pressure also originated from conglomerate stocks, which recorded significant declines and acted as the main weight on the JCI due to their large market capitalisation. He noted that the JCI’s movement is currently in a weakening phase, with no immediate signs of a rebound. From a technical perspective, the JCI remains in a downtrend and has not yet shown valid signs of a reversal.

Money market observer Ibrahim Assuaibi assessed that the rupiah’s weakness was triggered by increasing geopolitical tensions in the Middle East, which have driven up global oil prices and strengthened the US dollar. “Today, the rupiah weakened again due to the strengthening of global crude oil, with WTI at 94.58 (US dollars per barrel) and Brent crude oil also rising to 96.72,” said Ibrahim.