JCI Potentially Under Pressure Amid MSCI Sentiment and Rupiah Weakness
Jakarta (ANTARA) - The Composite Stock Price Index (JCI) of the Indonesia Stock Exchange (BEI) opened weaker on Wednesday morning, falling 94.96 points or about 1.38% to the level of 6,763.94 amid pressures from global and domestic sentiment.
In her analysis in Jakarta on Wednesday, Head of Research at Kiwoom Sekuritas, Liza Camelia Suryanata, assessed that the JCI’s decline was triggered by a combination of the removal of several Indonesian stocks from the Morgan Stanley Capital International (MSCI) index, the weakening rupiah, and growing market concerns over the direction of US interest rate policy.
As is known, MSCI officially announced the results of its May 2026 rebalancing.
MSCI removed six Indonesian stocks from the MSCI Global Standard Index, namely PT Amman Mineral Internasional Tbk (AMMN), PT Barito Renewables Energy Tbk (BREN), PT Chandra Asri Pacific Tbk (TPIA), PT Dian Swastatika Sentosa Tbk (DSSA), PT Petrindo Jaya Kreasi Tbk (CUAN), and PT Sumber Alfaria Trijaya Tbk (AMRT).
Meanwhile, on the MSCI Small Cap Index, MSCI included the shares of PT Sumber Alfaria Trijaya Tbk (AMRT) in the small cap index.
Additionally, 13 other Indonesian stocks were also removed from the MSCI Small Cap Index, resulting in a total of 18 Indonesian stocks exiting all categories of the MSCI indices.
According to Liza, MSCI’s decision increases the risk of continued foreign fund outflows (foreign outflow) from the domestic stock market and worsens investor sentiment towards the JCI.
“This decision enlarges the risk of continued foreign outflow from the domestic stock market and further pressures JCI sentiment amid the rupiah’s weakening that has breached the psychological level of Rp17,500 per US dollar,” said Liza.
In addition, the rupiah’s weakening factor, which has already breached Rp17,515 per US dollar, also serves as a market pressure catalyst.
On the global side, the US dollar strengthened and recorded its best daily performance in nearly two weeks after US inflation data showed an increase above market expectations.
US Consumer Price Index (CPI) data for April was recorded to rise 0.6% month-on-month and 3.8% year-on-year, higher than market expectations of 3.7% year-on-year.
Meanwhile, Core CPI rose 0.4% month-on-month and 2.8% year-on-year, also exceeding market projections.
This situation has triggered market expectations that the US central bank (The Fed) may raise its benchmark interest rate again.
Market participants are also monitoring the dynamics of the leadership transition at The Fed after the US Senate confirmed Kevin Warsh as a member of The Fed’s Board of Governors through a 51-45 vote.
“Voting for the chairman position is expected to take place this week, replacing Jerome Powell. The majority of Democrats rejected Warsh due to concerns that the central bank’s independence would be disrupted, although Warsh affirmed that he would remain independent,” explained Liza.
Furthermore, market attention is focused on the meeting between US President Donald Trump and Chinese President Xi Jinping in China this week, which is expected to discuss issues related to Iran, trade, and bilateral relations amid increasing global tensions.