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IDX Composite falls for sixth-straight day, slips below 7,000

The IDX Composite index fell 1.84 percent on Thursday, marking its sixth straight day of losses. Analysts predict the index performance to remain weak by year-end.

News Desk (The Jakarta Post)
Jakarta
Thu, December 19, 2024

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IDX Composite falls for sixth-straight day, slips below 7,000 Workers clean the Indonesia Stock Exchange (IDX) logo at the IDX in Jakarta, on Oct. 18, 2024. The IDX Composite index fell 1.84 percent to close at 6,977.24 on Dec. 19, 2024. (Antara Foto/Aprillio Akbar)

T

he Indonesia Stock Exchange (IDX) Composite index continued its downward trend on Thursday, falling by 1.84 percent, past the 7,000-level to close at 6,977.24. This marks the sixth consecutive day of losses for the Composite index.

The total trading volume for the day reached 20.4 billion shares, with a transaction value of Rp 13.2 trillion (US$850 million). Out of the 788 stocks traded, 521 declined, 97 rose and 170 remained unchanged.

Every sector saw significant losses, with the raw materials sector taking the hardest hit, falling by 3.63 percent. The healthcare sector followed closely, losing 2.63 percent, while the energy sector dropped 2.49 percent.

The non-primary consumer goods sector also saw a steep decline of 2.41 percent, followed by the technology sector at 1.88 percent and the financial sector, 1.84 percent. Other sectors such as industrials, property and infrastructure also recorded losses, with declines ranging from 1 to 1.74 percent.

Only four companies posted gains in the LQ45 index. PT Pertamina Geothermal Energy (PGEO) rose by 7.22 percent, followed by PT Medco Energi Internasional (MEDC), which increased by 1.94 percent, PT Amman Mineral International (AMMN), which gained 1.13 percent, and PT United Tractors (UNTR), which added 0.1 percent.

On the downside, the top losers in the LQ45 index were PT Bank Jago (ARTO), which plunged 9.27 percent, PT Merdeka Copper Gold (MDKA) at 8.24 percent, and PT Merdeka Battery Materials (MBMA), which dropped 5.83 percent.

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The negative sentiment in the market was largely driven by the cautious stance of the United States Federal Reserve following its recent decision to cut interest rates by 25 basis points. Although the move was anticipated, the Fed's more dovish comments about future rate cuts spooked investors, leading to risk-off sentiment globally.

The Fed's revised forecast now shows a smaller-than-expected reduction of 50 basis points in 2025, down from the earlier expectation of 100 basis points.

“It seems that the Federal Open Market Committee [FOMC] results yesterday, even though there was a cut, were seen as hawkish. So, the market posture is very risk-off, playing it safe, buying US dollars and yields are rising,” BCA senior economist Barra Kukuh Mamia said on Thursday, as quoted by cnbcindonesia.com.

Domestically, the market also faced pressure after Bank Indonesia (BI) announced that it would maintain the BI-rate at 6 percent. This decision came as a surprise, as many had expected a rate cut.

BI Governor Perry Warjiyo explained that the decision aimed to maintain the stability of the rupiah amid the strengthening of the US dollar.

Looking ahead, Kukuh suggested that the IDX Composite's performance by year-end would likely remain weak.

"Possibly failing to reach the 7,500-8,000 area. If I look at the possibility, the IDX Composite will be tested in the support area at 7,000. Even if it goes up within a few days, it is likely to be [only up to] 7,500," Kukuh said.

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