JCI Plummets 3.87% Amid Global Sentiment Pressures
The Indonesia Composite Index (JCI) on the Indonesia Stock Exchange (IDX) plummeted by 3.87% as of 10:03 WIB on Monday. This sharp decline is driven by increasing pressure from global sentiments, ranging from geopolitical tensions to expectations of higher interest rates persisting for a longer period in international financial markets.
Rully Arya Wisnubroto, Head of Research and Chief Economist at Mirae Asset, explained that the market sell-off was triggered by the intensifying US-Iran conflict. This situation has pushed Brent crude oil prices to remain around USD 110 per barrel, sparking fears that inflationary pressures are no longer transitory but potentially structural.
“Consecutive US inflation data has confirmed price pressures, shifting market expectations from a loosening scenario towards the possibility of global interest rates remaining higher for longer,” he stated in an official release. According to Rully, this shift in expectations has triggered repricing in global financial markets, directly impacting emerging economies, including Indonesia. The risk of capital outflows from both bond and equity markets has increased, subsequently putting pressure on State Treasury Bill (SBN) yields and weakening the Rupiah.
Domestic market pressure is also linked to volatility in global bond markets observed over the previous weekend. The 10-year US Treasury (UST) yield surged to 4.59%, while the 2-year yield rose to 4.07%—both reaching their highest levels in a year. Similar rises in yields were seen in other developed nations; the 30-year Japanese Government Bond (JGB) yield surpassed 4% for the first time since 1999, and the 10-year UK gilt yield rose to 5.17%, the highest since 2008. Simultaneously, the US Dollar Index (DXY) strengthened to 99.28 as funds flowed into safe-haven assets, signalling high caution among global investors.
Furthermore, the domestic market continues to be overshadowed by the impact of the MSCI index rebalancing, which saw several major Indonesian stocks removed. Capital market observer Hendra Wardana highlighted that the May 2026 MSCI rebalancing triggered capital outflows of Rp50.63 trillion, contributing to the downward pressure on the JCI. The IDX views the conclusion of the MSCI rebalancing as a step towards reducing uncertainty that has been clouding the domestic financial market amidst global pressures.