Market awaits Fed rate direction, IHSG closes lower at 6,130

The Indonesian Composite Index (IHSG) of the Indonesia Stock Exchange (BEI) closed lower on Tuesday as market participants adopted a wait-and-see approach regarding the direction of the US Federal Reserve’s benchmark interest rate. The IHSG closed down 55.19 points, or 0.89%, at 6,130.59. Meanwhile, the LQ45 index of 45 leading stocks fell 4.53 points, or 0.74%, to 608.03. “The IHSG continued to weaken amid pressure from the depreciating rupiah,” said Phintraco Sekuritas Head of Research, Ratna Lim, in a note in Jakarta on Tuesday. From the global front, crude oil prices continued to experience a correction following reports of discussions between Iran, Saudi Arabia and Oman regarding shipping lanes in the Strait of Hormuz on Tuesday. On the other hand, market participants are awaiting the results of the Federal Open Market Committee (FOMC) meeting scheduled for Wednesday evening, with consensus expecting the benchmark interest rate to remain unchanged as US inflation begins to ease and global crude oil prices decline. Domestically, the rupiah exchange rate closed down 0.41% at Rp18,083 per US dollar in the spot market, approaching its all-time low of Rp18,190 per US dollar. Ratna said the continued pressure on the rupiah was influenced by external and domestic factors, with the external factor being the continued strengthening of the US dollar index ahead of the Fed meeting this week. “Investors remain in a wait-and-see mode amid increasing uncertainty regarding the appointment of the next definitive Governor of Bank Indonesia, which is considered to have an impact on the central bank’s future policies,” Ratna said. The IHSG opened lower and remained in negative territory until the close of the first trading session. In the second session, the IHSG continued to stay in the red until the close of trading. Based on the IDX-IC sectoral indices, one sector strengthened, namely the primary consumer goods sector, which rose 0.43%. Meanwhile, ten sectors weakened, with the property sector experiencing the deepest decline of 2.78%, followed by the energy and financial sectors, which fell 1.59% and 0.93% respectively. Stocks that experienced the largest price gains included KOBX, ALKA, DWGL, MCAS, and ZONE. Meanwhile, stocks that experienced the largest price declines included MPRO, KDTN, DMMX, ARKO, and TAMA. The frequency of share trading was recorded at 1,659,000 transactions, with 24.09 billion shares traded, worth Rp12.12 trillion. A total of 281 stocks rose, 380 stocks fell, and 304 stocks remained unchanged. Regional Asian bourses in the afternoon saw the Nikkei index weaken 3.83% to 62,446.00, the Shanghai index fall 1.16% to 3,813.31, the Hang Seng index strengthen 0.41% to 25,310.85, the Kospi index drop 10.84% to 6,023.66, and the Straits Times index weaken 0.02% to 5,619.22.