Mideast Tensions, Fiscal Strains Hit Indonesian Stocks

Indonesian shares slipped 50 points, or 0.7%, to 7,056 in Tuesday morning trade, marking losses for a seventh straight session and hovering near a three-week low. Sentiment stayed fragile as prospects for ending the Middle East conflict appeared dim. Iran reportedly offered to halt attacks on ships in the Strait of Hormuz in exchange for a full end to the war, but President Trump voiced skepticism. Locally, concerns mounted after the government’s emergency fund shrank by more than Rp300 trillion, raising fears over Indonesia's fiscal health and a potential financial crisis. Still, weakness was offset by optimism that the IDX Composite has entered oversold territory, with analysts flagging rebound potential. Losses were broad-based, led by non-cyclicals, transport, and energy. Major laggards included Bank CIMB Niaga (-8.9%), MNC Digital (-7.8%), and Triputra Agro Persada (-4.3%). Focus now shifts to the U.S. Fed’s rate decision and key domestic data on April inflation and March trade.

Indonesian stocks rose 22 points, or 0.3%, to 7,150 in Monday’s morning session, snapping a five-day losing streak and rebounding from a three-week low. Bargain hunting supported sentiment after last week’s selloff, which was driven by concerns over structural weaknesses in domestic capital markets. Additional support came from strong Q1 industrial profit growth in China, Indonesia’s largest trading partner, pointing to resilient external demand. Meanwhile, U.S. equity futures strengthened as traders looked past renewed diplomatic setbacks between the U.S. and Iran. Gains were restrained by caution ahead of Indonesia’s April inflation release later this week, with risks amplified by elevated oil prices linked to Middle East tensions. Sector-wise, basic materials, financials, and cyclicals led the advance, while energy and healthcare lagged. Among notable movers were GojekTokopedia (3.9%), Bumi Resources (3.7%), Mitra Adiperkasa (2.7%), and Vale Indonesia (2.2%).

Indonesia’s IDX Composite dropped 103 points, or 1.4%, to 7,275 in Friday morning trade, extending losses from the prior session and notching a two-week low. A drop on Wall Street overnight pressured sentiment, amid a fragile Middle East ceasefire and stalled U.S.–Iran peace talks. President Trump reportedly said he had ordered the Navy to “shoot and kill” Iranian boats laying mines in the Strait of Hormuz. On the financial front, Fitch cut the credit outlook of four major banks in Indonesia, including Bank Mandiri, Bank Rakyat Indonesia, Bank Central Asia, and Bank Negara Indonesia, from stable to negative. Weekly, the index is on track to fall about 4%, following recent gains. Still, losses were capped by government efforts to secure 150 million barrels of Russian oil under its energy strategy. Declines were broad-based, led by infrastructure, basic materials, and cyclicals. Major laggards included Bank Tabungan Negara (-6.4%), Medco Energy (-4.2%), and Unilever Indonesia (-3.3%).