Flooring Guide by Cinvex – , JAKARTA — The Indonesian Composite Stock Price Index (IHSG) is expected to experience volatility this week, with limited potential for a significant technical rebound. Trading activity is likely to be more sensitive as the market will only operate for three days due to the national holiday for Eid al-Adha.
Last week, from May 18-22, 2026, the composite index faced considerable pressure, experiencing a sharp correction of 8.35% to close at 6,162.045. It even touched a year-to-date low of 5,966 during the trading period.
Brigita Kinari, Equity Analyst at PT Indo Premier Sekuritas (IPOT), explained that the index’s decline was driven by a combination of investor risk-off sentiment.
On the external front, the market was shadowed by the US Federal Reserve’s hawkish stance, with expectations that interest rates would remain high for an extended period. Domestically, Bank Indonesia’s (BI) decision to raise its benchmark interest rate by 50 basis points fueled concerns about a slowdown in economic liquidity.
Brigita further noted that investor anxieties were exacerbated by the planned implementation of a single-door export policy for strategic commodities.
However, rumors of a postponement of this policy until January 1, 2027, successfully triggered a significant rebound towards the end of last week, particularly propelled by a surge in the basic materials and energy sectors.
Amidst a wait-and-see approach regarding the FTSE Russell review results, foreign investors recorded a net sell of Rp309.52 billion by the week’s end.
Consequently, the market capitalization of the Indonesia Stock Exchange (IDX) was trimmed by 10.06% to Rp10,635 trillion. However, the average daily transaction value increased by 15.68% to Rp21.77 trillion, indicating robust portfolio repositioning activity.
For the current week, Brigita pointed out that domestic investor attention will be focused on the implementation of the single-door export policy through Danantara Sumber Daya Indonesia (DSI), which is reportedly still effective starting June 1, 2026.
On the other hand, market sentiment received a boost from the relatively constructive FTSE Russell review, which helped to alleviate concerns. Bank Indonesia’s policy of raising the benchmark interest rate is also beginning to positively impact the rupiah’s exchange rate.
From a technical standpoint, Brigita elaborated that the IHSG is trading well below its 50-day moving average (SMA-50) at the 7,166 level, suggesting that a medium-term downtrend remains dominant. The MACD indicator is also holding in negative territory, reinforcing the view that the gains made late last week were primarily a technical rebound.
“The strengthening observed so far is still considered a technical rebound and has not yet confirmed a significant trend change,” she concluded.
In the short term, the IHSG is projected to trade sideways with high volatility, facing support levels between 5,996–5,899 and resistance levels at 6,318–6,459.
Selling pressure is anticipated to ease after the rebalancing period concludes, especially if the rupiah remains stable and developments in US-Iran negotiations successfully reduce pressure on global energy prices.
IPOT’s Recommended Stocks for This Week:
PT Merdeka Copper Gold Tbk. (MDKA)
– Recommendation: Buy
– Entry: 2,720
– Target Price: 3,000
– Stop Loss: 2,610
PT Bank BTPN Tbk. (BTPN)
– Recommendation: Buy
– Entry: 2,380
– Target Price: 2,530
– Stop Loss: 2,310
PT Ultra Jaya Milk Industry & Trading Company Tbk. (ULTJ)
– Recommendation: Buy
– Entry: 1,635
– Target Price: 1,725
– Stop Loss: 1,590
Disclaimer: This news is not intended to solicit the purchase or sale of stocks. Investment decisions are entirely at the reader’s discretion. Bisnis.com is not responsible for any losses or profits arising from the reader’s investment decisions.
Summary
The Indonesian Composite Stock Price Index (IHSG) is anticipated to exhibit volatility this week, with limited prospects for a substantial technical rebound. The trading week will be shortened to three days due to the Eid al-Adha holiday. Last week, the IHSG experienced a significant correction of 8.35%, closing at 6,162.045 and hitting a year-to-date low of 5,966. This decline was attributed to a combination of external factors, including the US Federal Reserve’s hawkish stance on interest rates, and domestic concerns stemming from Bank Indonesia’s 50 basis point benchmark rate hike, which raised worries about economic liquidity.
Investor anxiety was further fueled by the planned single-door export policy for strategic commodities. However, rumors of a postponement of this policy to January 1, 2027, led to a late-week rebound, particularly in the basic materials and energy sectors. Technically, the IHSG remains below its 50-day moving average, indicating a dominant medium-term downtrend, with current gains viewed as a technical rebound rather than a trend change. The index is expected to trade sideways with high volatility, facing support at 5,996–5,899 and resistance at 6,318–6,459.