The Indonesia Stock Market has faced significant volatility in response to global trade tensions. Investors remain cautious as economic uncertainty grows, influenced by U.S. tariff policies and trade relations with China. Market analysts are closely monitoring both international and domestic factors to gauge the future direction of Indonesia’s stock performance.
Global Trade Tensions Impact the Indonesia Stock Market
Recent developments in U.S.-China trade policies have placed pressure on emerging markets, including Indonesia. U.S. President Donald Trump’s tariff policies have created instability in global financial markets. Maximilianus Nico Demus, Director of Research and Investment at Pilarmas Investindo Sekuritas, stated, “Externally, Asian regional markets tended to weaken due to U.S. President Donald Trump’s tariff policies.”
Markets are also closely watching the scheduled implementation of U.S. reciprocal tariffs on April 2. Trump has signaled that adjustments to this policy are possible, adding further uncertainty. Meanwhile, the anticipated negotiations between the U.S. Secretary of Commerce and China have created mixed reactions, as investors remain uncertain about future trade relations.
Foreign Capital Outflows Add to Market Pressure
In addition to global influences, foreign capital outflows have exacerbated Indonesia’s stock market downturn. Bank Indonesia (BI) reported that IDR 4.25 trillion in foreign capital exited the domestic financial market between March 17-20, 2025. As investors weigh risks, capital flight has intensified market pressure.
Leading up to the long Eid holiday, many investors have chosen to take profits. The combined effect of international uncertainty and capital outflows has led to increased market volatility, raising concerns over short-term stability in the Indonesia Stock Market.
Domestic Economic Challenges Weigh on Market Performance
Several domestic factors have also contributed to the market’s recent fluctuations. Weakening household purchasing power and rising layoffs in key sectors have created additional economic strain. “This situation indicates that the domestic economy is facing significant challenges,” Nico added.
Another factor influencing investor sentiment is the political uncertainty surrounding policy changes. Protests against the ratification of the Indonesian National Armed Forces Law (UU TNI) and concerns over the formation of the Daya Anagata Nusantara Investment Management Agency (BPI Danantara) have increased market anxiety.
However, after an initial decline, the Jakarta Composite Index (JCI), also known as IHSG in Indonesia, rebounded following the announcement of BPI Danantara’s structure. Investment and Downstream Minister Rosan Roeslani confirmed that IHSG showed significant improvement after the BPI Danantara announcement. “Indeed, IHSG dropped earlier this morning. But after the Danantara announcement, it actually rose. I just checked, and what was previously a 200-300 point drop is now only around 80 points. A positive trend is visible after the Danantara announcement,” Rosan stated, as cited by akurat.co.
The new structure of BPI Danantara reassured investors by signaling stronger investment management policies. This helped IHSG recover from its losses and stabilize market conditions. Analysts believe that continued clarity on policy implementation could further strengthen market confidence.
Key Sectors Affected by the Market Decline
Several industries have been impacted by stock market fluctuations. The banking and finance sector, which is heavily influenced by foreign investments, has experienced volatility. Manufacturing and export-dependent industries have also been affected by global trade uncertainty.
Meanwhile, some consumer goods companies have shown resilience. On the trading floor, stocks such as HITS, JGLE, POLU, UVCR, and TARA recorded gains, while BINO, FORU, MSIN, WINE, and BIMA saw the steepest declines. These movements reflect shifting investor sentiment amid global and domestic challenges.
Market Outlook: What’s Next for Investors?
Looking ahead, market analysts expect continued fluctuations in the Indonesia Stock Market. The upcoming decisions from the Association of State-Owned Banks (Himbara) during the Annual General Meeting of Shareholders (RUPST) could influence investor confidence. “If the announced policies do not meet market expectations or create further uncertainty, IHSG could decline even further,” Hendra Wardana, Founder of Stocknow.id, explained, as reported by kompas.com.
Analysts also warn that if IHSG fails to hold the 6,000 level, it may drop further to 5,800. However, if domestic economic policies provide reassurance, the market could stabilize and attract renewed investor interest.
Stock Market Stability in the Near Future
The Indonesia Stock Market remains highly sensitive to global trade policies and domestic economic conditions. While foreign capital outflows and political uncertainties have created downward pressure, recent policy announcements have helped stabilize market sentiment. Investors will continue to monitor trade negotiations, capital movement, and domestic policy shifts to navigate the evolving market landscape.
Source: kompas.com, akurat.co
Image: Getty Images
