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IDX Composite drops as foreign outflows weigh on market

The IDX Composite index plunged 1.02 percent on Monday amid global concern over the United States Federal Reserve’s rate cuts and continued foreign capital outflows.

News Desk (The Jakarta Post)
Jakarta
Mon, January 13, 2025

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IDX Composite drops as foreign outflows weigh on market Workers clean the logo of the Indonesia Stock Exchange (IDX) below a screen displaying the IDX Composite index at the bourse in Jakarta in October 2024. The IDX Composite index plunged 1.02 percent to close at 7,016.88 on Jan. 13, 2025. (Antara Foto/Aprillio Akbar)

The Indonesia Stock Exchange (IDX) Composite index ended lower on Monday, falling by 1.02 percent to close at 7,016.88.

The decline was evident across most sectors, with eight out of eleven sectors finishing in the red. The industrial sector led the losses, dropping by 1.30 percent, while the financial sector followed closely with a 1.21 percent decline.

The technology sector fell by 1.09 percent and the transportation and logistics sector slipped 0.88 percent. Other notable declines included the infrastructure sector, which dropped by 0.74 percent, and the property and real estate sector, which fell by 0.70 percent.

Only three sectors posted gains on the upside. The basic materials sector was the best performer, rising by 0.58 percent, followed by the healthcare sector, which gained 0.21 percent, and the energy sector, which edged up by 0.10 percent.

Total trading volume for the day reached 16.5 billion shares, with a transaction value of Rp11.7 trillion (US$717 million). Of the 803 stocks traded, 383 stocks declined, 234 rose and 186 remained unchanged.

In the LQ45 index, the top gainers were PT Medco Energi Internasional (MEDC), which surged 7.14 percent, PT Indah Kiat Pulp & Paper (INKP), up 4.69 percent, and PT Merdeka Copper Gold (MDKA), which rose by 4.61 percent.

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The biggest losers in the LQ45 index were PT Summarecon Agung (SMRA), which dropped by 4.56 percent, PT Bank Jago (ARTO), down 4.31 percent, and PT Bank Rakyat Indonesia (BBRI), which fell by 3.99 percent.

Pilarmas Investindo Sekuritas attributed the correction in the IDX Composite to external and internal factors.

Externally, the market’s pessimism was triggered by concerns over a slower pace of interest rate cuts by the US Federal Reserve. This sentiment was fueled by stronger-than-expected United States economic data, particularly December 2024 payrolls, which rose by 256,000, and the unemployment rate, which dropped from 4.2 percent to 4.1 percent.

"This could put pressure on the market, as higher interest rates reduce the appeal of holding assets that do not provide returns," said Pilarmas in its report on Monday, as quoted by investor.id.

Domestically, the ongoing outflow of foreign investors continues to weigh on the IDX Composite.

"The market is observing that foreign investor outflows are still happening," said Pilarmas.

Data from Bank Indonesia showed a foreign capital outflow of Rp4.38 trillion between Jan. 6 to 9, adding to concerns about investment risk premiums in the domestic market.

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