JCI Drops to 5,800 Level, Analysts: Burdened by Rupiah

The Jakarta Composite Index (JCI) plummeted sharply today. During the first trading session, the JCI dropped by 4.94 per cent to the 5,889 level. Stock analyst Herditya Wicaksana from MNC Sekuritas stated that the depreciation of the rupiah against the US dollar has been the primary sentiment driving the significant weakening of the index.

The JCI weakened by 255.71 points, or 4.13 per cent, to the 5,939.71 position 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 currently 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. “On the other hand, the movement of the JCI is burdened by conglomerate issuers that have seen significant movements over the last two days, even experiencing automatic reject upwards (ARA),” added Didit.

Didit noted that the JCI movement is currently still in a weakening phase, and there is no opportunity for a rebound in the near future. “From a technical perspective, the JCI movement is still in a downtrend phase and has not yet shown any valid signs of a reversal,” he said.

As information, the rupiah exchange rate was recorded at the level of Rp17,928.50 per US dollar during trading at 11:10 WIB. Money market observer Ibrahim Assuaibi assessed that the rupiah’s weakness was triggered by increasing geopolitical tensions in the Middle East, which drove up global oil prices and strengthened the US dollar position. “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 experiencing an increase to 96.72,” said Ibrahim.