Waiting for the IHSG Rebound: Positive Signals Emerge, but Risks Remain

Amid lingering uncertainty in the capital market, the question of when the Indonesia Stock Exchange Composite Index (IHSG) will enter a rebound phase remains a focus for investors. While no one can pinpoint the exact turning point, several recent developments are beginning to signal an improvement in market sentiment. A number of indicators and the latest developments are starting to show signs of improving sentiment. However, risks and challenges still loom, so investors need to remain objective in observing market dynamics before making decisions.

Early Signs of Recovery Emerging

Some market participants are beginning to feel optimistic again, supported by the IHSG’s strengthening in recent weeks. However, others remain cautious due to the lingering trauma of the recent sharp correction. Despite differing views, almost everyone agrees that no one can be certain when the market’s turning point will actually occur. History shows that market recovery does not happen suddenly. Before a trend reverses, various changes in market indicators and investor sentiment usually appear, gradually creating more conducive conditions. Therefore, rather than trying to guess when the market will hit its lowest point or start a rebound phase, investors tend to focus on observing the various signals that are forming as a basis for their decision-making.

Positive Catalysts Driving Market Sentiment

Several developments in recent weeks have been seen as supporting the improvement in market sentiment. These include Bank Indonesia’s interest rate hike, which some market players view as an effort to maintain exchange rate and inflation stability, the implementation of the Export Proceeds (DHE) policy, government budget efficiency, coordination between the government, Himbara banks, and Danantara to maintain market stability, easing geopolitical tensions, and high global investor interest in the prospects of international funding instruments to be managed by Danantara. These factors are considered to have helped build more positive sentiment in the market through improved perceptions of economic stability, although their effectiveness still depends on policy implementation and global developments. The impact has not yet fully changed market conditions, but the pace of the IHSG’s decline has eased, and these policies have received a more constructive response from market players. Recently, market attention has also been focused on the IHSG’s ability to hold above the psychological level of 6,000. For many investors, this level serves as an important reference in assessing market resilience, even though it is not the sole determinant of the index’s direction.

Indicators Closely Watched by Investors

In addition to these catalysts, investors are monitoring several indicators that have historically been used as references for reading market recovery phases. One of them is the slowing pace of capital outflows or a reduction in net foreign sell. Historically, a stronger market recovery phase is often accompanied by a slowdown in foreign capital outflows or even a reversal into net foreign buy, although this condition is not the only factor determining market direction. At the same time, the intensity of panic selling also tends to decrease, so selling pressure is no longer as heavy as during the correction phase. Attention is also focused on large-cap stocks. When these stocks stop forming new lower lows, this condition is often seen as one signal of increasing accumulation by institutional investors, although price movements alone cannot confirm the identity of the transacting parties. The market’s response to various negative news is also an indicator that is widely observed. If negative news no longer triggers a deeper correction, this condition is often viewed as a signal that some of the negative sentiment has been priced in, so selling pressure is starting to ease. Alongside this, increasing positive sentiment, the IHSG’s resilience at technical levels closely watched by market participants, the strengthening of the rupiah exchange rate, and reduced selling pressure are a combination of indicators that investors continue to monitor.

MSCI and FTSE Evaluations Remain a Concern

Market attention is also focused on three important agendas throughout June 2026, namely the MSCI Global Market Accessibility Review, the FTSE Russell Rebalancing, and the MSCI Annual Market Classification Review. These three agendas are influencing short-term investor sentiment. MSCI did lower Indonesia’s assessment on the aspect of share ownership transparency in the Market Accessibility Review. However, the results of this evaluation did not change Indonesia’s status in the MSCI market classification. During the FTSE Russell Rebalancing process, pressure from foreign capital outflows did occur. However, buying actions by domestic investors, buyback programmes by several Himbara banks, and various market stabilisation efforts helped to dampen the selling pressure, so IHSG volatility remained relatively under control. This series of agendas concluded with MSCI’s decision to maintain Indonesia in the Emerging Market category. This decision reduced one source of uncertainty that had previously been a concern for investors regarding a possible change in Indonesia’s market classification. Nevertheless, various notes from MSCI also indicate that capital market reform still needs to be continued, especially regarding share ownership transparency and market governance. The consistency of implementing these reforms is expected to remain a focus for global investors, given that MSCI is scheduled to conduct a further evaluation in November to review the progress of various reforms announced by regulators.