Testing the Potency of 'Octobull' and 'Bear Killer' in the IDX for October 2026

October is typically a month of hope for Indonesian stock investors. In the last decade, the Indonesia Composite Index (IHSG) has more frequently strengthened during this month. However, entering October 2026, this positive seasonal pattern faces pressure from foreign selling and continued tight interest rate conditions.

The IHSG closed September at 6,071.14 after weakening by approximately 6.96% throughout the month. Considering price momentum, foreign transactions, and monetary conditions, this analysis provides a projection for the end-of-October closing scenario.

This scenario depicts a market moving with volatility and downward pressure. Opportunities for a rebound remain open, but sustained growth requires support from fund flows and improved economic expectations.

October, Is it Still ‘Octobull’ and ‘Bear Killer’?

October often receives two nicknames in the stock market: ‘Octobull’ and ‘Bear Killer’. ‘Octobull’ is a play on the words October and bull, referring to the hope that the stock market enters a strengthening phase after the pressures often seen in September.

Meanwhile, ‘Bear Killer’ describes October’s reputation as a month that, in several historical episodes, has served as a turning point after periods of prolonged pressure or heavy selling. Nevertheless, October is also known as a highly volatile month, with several major market crashes occurring during this period, making both terms more accurate as market jargon rather than a guarantee of a market rally.

The track record of October provides reasons for optimism. Between 2016 and 2025, the IHSG strengthened in eight out of ten Octobers. The largest increases occurred in 2020 by 5.30%, followed by 2021 by 4.84%. The track record also provides reasons not to be overly pessimistic. Two exceptions occurred in 2018 and 2023, when the index weakened by 2.42% and 2.70%, respectively.

The median increase in this sample reached approximately 1.02%. This pattern serves as a supporting factor for recovery opportunities, but eight increases out of ten observations does not automatically mean an 80% chance of an increase in October 2026. Interest rates, exchange rates, valuations, and corporate earnings differ every year.

For October this year, price conditions still signal caution. At the end of September, the IHSG was below its 20-day average of approximately 6,434 and its 50-day average of approximately 6,392. This position indicates that short-term momentum remains weak. A momentary rise is not enough to ensure a change in trend. A recovery that stays above both averages would be one reason to revise the outlook.

Foreign pressure was also evident in the final trading days of September. Foreign investors recorded net selling of around Rp1.56 trillion in the regular market and Rp1.61 trillion across the entire market on 30 September 2026. By comparison, in October 2025, the OJK recorded foreign net buying of Rp12.96 trillion over the month, alongside an IHSG increase of approximately 1.28%. This comparison highlights the importance of monitoring fund flows, even if it does not prove that foreign transactions are the sole driver of index movement.

From a global perspective, the Fed increased the interest rate range by 25 basis points to 3.75-4.00% in September. Higher dollar rates have the potential to increase the yields demanded by investors to hold risky assets, including Indonesian stocks. However, the September decision is already known to the market. Additional drivers during October will primarily come from new information: whether developments in inflation and Fed communications lead to policies that are tighter than investor expectations.

Domestically, Bank Indonesia maintained the BI-Rate at 5.75%. September inflation was recorded at 3.28% year-on-year, while core inflation stood at 2.84%. General inflation is approaching the upper limit of Bank Indonesia’s target, but remains within its range. This condition limits optimism regarding rapid easing, yet does not guarantee that BI must raise rates again.

A balancing factor comes from the SRBI (Bank Indonesia Instrument). The 12-month tenor yield fell from 7.70005% at the June auction to 6.75683% in September, a decrease of approximately 94.32 basis points. This decline indicates that domestic yield pressure has eased compared to mid-year. Alongside the positive seasonal pattern of October, this development provides a reason to remain open to an IHSG rebound, even though the Rupiah weakened again by about 7% during September.

The regional picture shows diverse conditions. During September, Taiwan, Japan, and South Korea continued to strengthen, while the IHSG recorded the deepest decline among the seven indices compared. The lag in the IHSG suggests that pressure is not uniform across Asia. Sectoral differences and exchange rates must be noted, as this data does not prove a direct shift of funds from Indonesia to other exchanges.

Towards the end of October, market attention will focus on the Bank Indonesia Board of Governors Meeting on 20-21 October and the Federal Open Market Committee (FOMC) meeting on 27-28 October in the United States. Decisions and communications from both central banks could influence market direction before the month’s close. Political volatility ahead of the second anniversary of the Prabowo-Gibran administration on 20 October will also be a point of interest.

The end-of-October scenario for the IHSG remains within the 6,000-6,200 range. This figure represents a tactical assessment of weak momentum and foreign pressure, with seasonal patterns and the decline in SRBI yields acting as balancing factors—rather than a calculation guaranteeing a specific closing point.