Flooring Guide by Cinvex – , JAKARTA — The Jakarta Composite Index (IHSG) has plummeted, falling below the crucial 8,000 level. Amidst this significant market turmoil, a planned liquidity injection by Danantara Indonesia emerges as a beacon of hope for market participants.
According to data from the Indonesia Stock Exchange (BEI), the composite index contracted by a notable 2.57% to 7,915.65 during trading on Friday, October 17, 2025. A stark imbalance was observed across the market: only 116 stocks managed to strengthen, while a massive 598 stocks tumbled, and 94 remained stagnant.
Liza Camelia Suryanata, Head of Research at Kiwoom Sekuritas, emphasized that the intense pressure gripping the IHSG fully reflects a prevailing global “risk-off” sentiment.
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Beyond mere technical corrections, the widespread market panic has been exacerbated by a confluence of factors: a burgeoning credit crisis in the United States and escalating geopolitical tensions between the US and China.
“A surge in corporate defaults from entities like First Brands, Tricolor Holdings, Zions Bancorporation, and Western Alliance has ignited fears of a financial sector domino effect, prompting global investors to rapidly divest from risky assets,” she stated in a research publication quoted on Saturday, October 18, 2025.
Liza further elaborated that the dramatic surge in global gold prices, reaching approximately US$4,300 per troy ounce, serves as a clear indicator of the profound tremors shaking global equity markets. This instability has reverberated across Asia and Europe, leading to widespread stock market corrections. Notably, the IHSG recorded one of the deepest declines, attributed to its inherently shallow liquidity.
Compounding these external factors, domestic sentiment has also contributed significantly to the mounting pressure. Rumors have circulated, according to Liza, suggesting that the government intends to foster a ‘true IHSG‘ by reducing interventions involving large conglomerate stocks. This initiative is reportedly coupled with efforts to curb “fried stocks” – a colloquial term for shares manipulated through pump-and-dump schemes.
“This sentiment caused several big-cap stocks, which typically act as index anchors, to be offloaded today, thereby intensifying the overall market pressure,” she added.
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Consequently, this challenging environment has laid bare the authentic character of the Indonesian stock market, particularly highlighting the vulnerability of the banking sector to foreign capital outflows due to its predominant foreign ownership structure.
Nonetheless, a significant positive catalyst remains that could potentially halt a deeper market downturn. This is Danantara’s strategic plan to inject substantial funds into the capital market.
Danantara is reportedly poised to roll out an investment of US$10 billion, equivalent to approximately Rp165 trillion, commencing in October 2025. A substantial portion, around 80%, is earmarked for domestic projects, with the capital market being a key beneficiary.
Based on estimates by Bisnis, if just 5%–10% of this total investment fund is allocated to the stock market, it could inject between Rp8 trillion and Rp16 trillion into the system.
“Such an allocation is anticipated to act as a crucial liquidity buffer, preventing further declines and simultaneously enhancing market depth, which has historically been thinner compared to neighboring economies like India and Hong Kong,” Liza explained.
Therefore, she believes the future trajectory of the composite index will pivot on two primary factors: the pace of stabilization within the US financial sector and the actualization of Danantara Indonesia’s domestic liquidity injection.
“Should this injection genuinely materialize and global markets begin to calm, there’s a strong short-term technical rebound potential, potentially pushing the index back towards the psychological 8,000 level,” she concluded.
However, as long as global volatility remains elevated and concrete policy responses from either the US or China are absent, the IHSG is expected to remain susceptible to fluctuations, with a defensive bias favoring stocks demonstrating strong fundamentals and high liquidity.
Market participants are also keenly anticipating the release of third-quarter 2025 financial performance reports, which are expected to serve as a primary driver for fundamental-based stock movements.
“Considering the extensive short-to-medium term market volatility, Kiwoom Sekuritas maintains its year-end IHSG target within the range of 7,800 to 8,000,” Liza stated.
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Disclaimer: This news article is not intended as an invitation to buy or sell stocks. Investment decisions rest solely with the reader. Bisnis.com is not responsible for any losses or gains arising from readers’ investment decisions.
Summary
The Jakarta Composite Index (IHSG) has significantly declined, falling below 8,000 to 7,915.65 amidst a global “risk-off” sentiment. This market pressure is attributed to a US credit crisis, US-China geopolitical tensions, and corporate defaults, along with domestic rumors of government reduced intervention in big-cap stocks. Such factors have led to a widespread sell-off and highlighted the market’s shallow liquidity.
A potential relief comes from Danantara Indonesia’s plan to inject US$10 billion (Rp165 trillion) into the capital market, with an estimated Rp8-16 trillion potentially allocated to stocks. This injection is expected to act as a crucial liquidity buffer, preventing further declines and enhancing market depth. The IHSG’s future trajectory hinges on the stabilization of the US financial sector and the actualization of Danantara’s investment, potentially enabling a short-term rebound towards the 8,000 level.