In the week concluding on July 24, Indonesia’s Jakarta Composite Index (JCI) experienced a rise of 0.34%, bolstered by heightened trading activity despite a backdrop of persistent foreign investor withdrawals and escalating uncertainties on the global economic stage. The market capitalization of the Indonesia Stock Exchange swelled to Rp 10,870 trillion, while the average daily trading turnover saw a significant leap of 41% to Rp 19.76 trillion. Nevertheless, foreign investors continued to be net sellers, with total outflows amounting to Rp 79.09 trillion thus far this year, a sign of the cautious stance towards Indonesian assets.
The buoyant trading volumes came amid a challenging environment where global factors exerted pressure on market sentiment. Notably, the rise in global oil prices, fueled by mounting tensions in the Middle East, contributed to investor hesitancy. Additionally, new tariff measures imposed by the United States on imports from various countries, including a 10% tariff on certain goods from Indonesia, added to the economic headwinds facing the nation.
Despite these challenges, the Indonesian government’s fiscal outlook remains stable. The country’s Finance Ministry recognized the potential impact of increased oil prices on the 2026 state budget, but maintains confidence in the overall fiscal health of Indonesia. The ministry’s reassurance comes at a time when external economic pressures are testing the resilience of emerging markets.
While the capital markets showed resilience with increased trading activity, the sustained foreign outflows highlight the cautious sentiment among international investors. This trend underscores the broader concerns about Indonesia’s economic prospects amid global uncertainties, with trade policies and geopolitical tensions playing significant roles.