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IDX Composite falls 0.95% amid US inflation data anticipation
The IDX Composite’s drop to 6,855.69 mirrored market caution, as upcoming United States CPI data casts a shadow over investors’ sentiment.
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A woman walks past a large screen displaying stock indices at the Indonesia Stock Exchange (IDX) in Jakarta on March 14, 2024. The IDX Composite index dropped 0.95 percent to close at 6,855.69 on June 11, 2024. (AFP/Bay Ismoyo)
T
he Indonesia Stock Exchange (IDX) Composite index dipped below the 6,900 mark on Tuesday. The index fell by 0.95 percent, or 65.86 points, closing at 6,855.69 at the end of Tuesday’s trading session.
The descent into the red zone was led by nine sectoral indices, with only two sectors showing resilience. The infrastructure sector saw a modest rise of 0.97 percent, while the energy sector inched up by 0.14 percent.
The industrial sector took a significant hit, plummeting by 2.45 percent. The financial sector and the non-primary consumer goods sector also faced downturns, dropping by 1.08 and 1.06 percent, respectively.
Leading the pack in the LQ45 index, PT ESSA Industries Indonesia (ESSA) surged 11.03 percent. PT Merdeka Battery Materials (MBMA) followed suit, climbing by 6.14 percent, and PT Indocement Tunggal Prakarsa Tbk (INTP) also made notable gains at 2.61 percent.
Despite these high achievers, the day ended with only eight LQ45 stocks in the green.
As for the top losers, PT Semen Indonesia (SMGR) led the decline with a 5.37 percent drop, closely followed by PT GoTo Gojek Tokopedia (GOTO) and PT Barito Pacific Tbk (BRPT), which fell by 5.36 and 4.83 percent, respectively.
The total trading volume on the exchange reached a staggering 17.24 billion shares, with a transaction value of Rp 9.3 trillion (US$570.64 million). No fewer than 366 stocks weakened, 198 strengthened and 215 remained unchanged.
The IDX Composite's performance was not an isolated case, as nearly all major Asian stock indices found themselves submerged in the red. The Asian markets failed to capitalize on the momentum gained by the United States stock exchanges. Hong Kong's Hang Seng Index experienced the sharpest decline, tumbling by 1.67 percent.
Investors' cautious “wait and see” approach, in anticipation of the US inflation data release later this week and the US Federal Reserve's interest rate decision, contributed to the IDX Composite's weakness.
The US consumer price index (CPI) data for May, set to be released on Wednesday evening Jakarta time, is expected to provide crucial guidance on the future direction of the Fed's benchmark interest rates. The consensus currently estimates that headline inflation will remain stable at 3.4 percent year-on-year (yoy), with core inflation predicted to ease to 3.5 percent yoy.
Should the inflation data deviate from expectations, a worst-case scenario could see the Fed maintaining its tight policy stance for longer than anticipated. The market is increasingly pessimistic about the possibility of an interest rate cut this year.
