The New Face of the IHSG: A 3% Decline Becomes Routine, Sad But What Can We Do?
Jakarta, CNBC Indonesia - The Jakarta Composite Index (IHSG) closed trading today, Tuesday, 19 May 2026, at 6,370.68, down 3.46% from the previous close. This marked the lowest close in a year and also the seventh daily correction above the 3% threshold since May 2025. Historical IHSG data for the period 20 May 2025 to 19 May 2026 covers 238 trading days. Across all sessions, there were seven days on which the index closed down 3% or more in a single session. The percentage is about 2.9% of total trading days, or roughly one such instance every 34 trading days.
2026 phenomenon
What is interesting about this data is not only its frequency but also the timing concentration. Throughout May to December 2025, or about seven months of trading, there was not a single day when the IHSG closed below minus 3%. The IHSG instead posted a rally during that period and hit the all-time closing high of 9,134.70 on 20 January 2026.
The situation reversed sharply afterwards. Five of the seven corrections above 3% occurred only within January to March 2026. Three of them on 4, 9, and 13 March occurred within a 10-calendar-day window. The remaining two corrections were spread across April and May 2026.
Policy and Geopolitical factors dominating
Of the seven events, two main factors dominated as triggers. First is sentiment surrounding changes to the composition of global indices, particularly MSCI’s decisions regarding the weighting of Indonesian stocks. The correction on 28 January 2026, the deepest at minus 7.35%, was the market’s response to MSCI’s statements concerning share ownership transparency and the free-float mechanism in the domestic exchange.
Today’s correction, (19 May 2026) was triggered by reports that the Indonesian government plans to establish a domestic export agency aimed at ensuring Indonesian commodity exports via government supervision.
The second factor is tensions in the Middle East. Three consecutive corrections on March 4, 9, and 13, 2026 occurred shortly after escalation of the conflict involving the United States and Iran. Uncertainty over shipping lanes and world oil prices also weighed on investor sentiment towards risk assets in developing markets, including Indonesia, as oil rose to around US$120 a barrel, up from around the US$70s in February.
From record to low
Viewed over a full year, the IHSG’s journey reflects two contrasting phases. In the second half of 2025, the index rose from 7,094.60 at the close on 20 May 2025 to a peak of 9,134.70 on 20 January 2026, a gain of about 28.7% in eight months. But after that massive rise, in the following four months the index had to reverse. From the open on 2 January to today’s close at 6,370.68, the IHSG has fallen about 26.32%. Year-on-year to 20 May 2025, the index was still down 10.35%. As of today, the 6,370.68 level is the lowest close in a year.
In terms of pressure, foreign net selling since the start of 2026 has reached around Rp 41.28 trillion as of 18 May 2026. This, combined with the rupiah’s depreciation to Rp 17,700 per US$, creates a layered pressure on the domestic stock market.