Indonesia’s stock market experienced a decline on Thursday as the Jakarta Composite Index (JCI) fell by 1.51%, closing at 5,247 points. This drop of 80 points came amid investor reactions to domestic monetary policies and ongoing global economic uncertainties.
Trading dynamics showed fluctuations with the index ranging between 5,185 and 5,350 points during early trading hours. The session saw approximately 1.22 billion shares traded across 76,140 transactions, totaling Rp 582.44 billion in value. The market trend was predominantly bearish, with 519 stocks declining, 54 advancing, and 106 remaining unchanged.
In response to financial challenges, Bank Indonesia retained its benchmark interest rate at 5.75% and its lending facility rate at 6.5%. However, the central bank increased the deposit facility rate by 25 basis points to 5% and introduced measures intended to draw foreign investment and bolster the rupiah. One such measure is the planned reduction in the average reserve requirement for conventional commercial banks from 9% to 7%, to be implemented in two stages by December 2026.
Despite the domestic market’s downturn, Indonesian stocks garnered interest from international investors, notably after a speech by President Prabowo Subianto. This interest was reflected in the US-listed iShares MSCI Indonesia ETF, which saw a gain of approximately 2%. However, analysts caution that this gain might not indicate a sustained recovery.
Global economic factors continued to exert pressure on market sentiment, with persistent inflation and uncertainty about future market conditions affecting investor confidence. Other Asian markets also saw declines, with Japan’s Nikkei 225, South Korea’s Kospi, Hong Kong’s Hang Seng, and Shanghai’s SSE Composite all opening lower.