Indonesia Equities Under Pressure After Fitch Outlook Cut

Indonesia’s IDX Composite dipped 166 points, or 2.2%, to 7,542 in early Friday trade, reversing the prior day’s strength following a weak U.S. lead overnight in a volatile week for global markets as Middle East tensions persisted. The benchmark index is on track for a second straight weekly decline, down about 8% so far, after Fitch Ratings slashed Indonesia’s outlook to negative from stable, citing rising policy uncertainty and erosion of credibility amid greater centralization of decision-making. Sentiment was further weighed down by China’s 2026 growth target of 4.5–5%, its lowest in decades, reflecting weak consumption and property sector strains. Nearly all sectors slipped, led by cyclicals, industrials, and energy. Notable losers included Elang Mahkota Teknologi (-3.9%), Astra International (-3.2%), Alamtri Minerals (-1.7%), and Bank Tabungan Negara (-1.5%). Traders now await key Chinese CPI and PPI data next week, along with combined January–February trade figures.

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%).