Indonesia Market Recovers After Recent Slide

Indonesian shares surged 120 points, or 1.6%, to 7,697 in Thursday’s morning session, halting a three-day slide as bargain hunters jumped in after markets hit a one-month low in the prior session amid escalating Middle East tensions. Sentiment improved after China, Indonesia’s top trading partner, unveiled a broad economic plan, setting its 2026 growth target at 4.5%–5% after meeting the 2025 goal of “around 5%.” Locally, Bank Indonesia reaffirmed continued intervention to stabilize the rupiah against rising global risk aversion, while authorities weighed potential fuel price adjustments following the closure of the Strait of Hormuz. However, strength was capped by caution ahead of the February forex reserve data, due Friday. Gains were broad-based, led by industrials, property, and infrastructure. Standout performers included Merdeka Battery Materials (7.0%), Surya Citra Media (6.0%), Unilever Indonesia (4.9%), and Mitra Adiperkasa (3.5%).

Indonesia’s IDX Composite slumped 295 points, or 3.7%, to 7,643 in Wednesday morning trade, marking a third straight decline and hitting its lowest level in near six weeks. The drop tracked weakness in U.S. stock futures as the Middle East conflict mounted. Sentiment was further pressured after February’s official PMI in main trading partner China showed declines in manufacturing and services activity following the extended Lunar New Year break, diverging from private survey data. Losses were partly capped by reports that Jakarta is preparing a sizeable Eid al-Fitr fiscal stimulus for civil servants and gig workers to offset external headwinds. Meanwhile, Bank Indonesia signaled close monitoring of inflation pass-through from higher global energy prices. Declines were broad-based, led by basic materials, transport, and cyclicals. Major laggards included Indah Kiat Pulp & Paper (-8.5%), Merdeka Battery Materials (-7.1%), Merdeka Copper Gold (-5.5%), and Telkom Indonesia (-4.9%).

Indonesia’s benchmark index fell 74 points, or 0.9%, to 7,940 on Tuesday afternoon, shifting from morning gains and marking a second straight session of losses. Sentiment soured as U.S. futures slumped, with traders weighing the impact of U.S. and Israeli strikes on Iran on energy prices and the global economy. Meanwhile, China signaled it is closely monitoring whether President Trump seeks new levers to reimpose duties struck down by the U.S. Supreme Court. Locally, inflation reaccelerated sharply in February to 4.76% from the prior 3.55%, the highest since March 2023, complicating prospects for moderation amid rising energy costs and rupiah weakness. The IDX Composite revisited a three-week low as most sectors retreated, led by transport, infrastructure, and property. Notable decliners included Elnusa (-4.5%), Amman Mineral International (-3.8%), Harum Energy (-3.3%), and Solusi Sinergi Digital (-3.0%). Investors now anticipate mainland PMI readings, set to be due on Wednesday.