Indonesian Stocks Fall as Investors Eye Security Risks

Indonesia's Composite Stock Price Index (IHSG) experienced a significant decline, closing down 1.48 percent at 6,405.69 on Wednesday, August 26, 2026. Investor sentiment was dampened by concerns over domestic security stability and upcoming protests. A key focus for market participants is the planned demonstration at the House of Representatives on Thursday, demanding the ratification of the Asset Forfeiture Bill.

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Market attention is focused on national security stability and macroeconomic fundamental factors. Market players hope the demonstrations proceed peacefully so that domestic security stability is maintained.

Adding to the cautious outlook, Fitch Ratings noted that while the government's 6.0 percent economic growth projection for 2027 is realistic, geopolitical uncertainties, rising oil prices, and undisciplined fiscal policy could hinder its achievement. Investors are also closely watching the confirmation hearing for the sole candidate for the Bank Indonesia governor position, Destry Damayanti, anticipating insights into future monetary policy, inflation control, and rupiah exchange rate stability.

Globally, Asian markets showed gains, influenced by progress in Middle East peace talks that eased worries about global energy supply disruptions. Pakistan reported significant progress in its discussions with Iran aimed at ending the war, and Iran and Oman explored a temporary transit corridor through the Strait of Hormuz. This eased pressure on inflation by reducing oil prices and concerns over potential disruptions in the vital waterway.

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Market players await the new Governor of Bank Indonesia's views on monetary policy direction, inflation control, rupiah exchange rate stability, and strategies for maintaining foreign capital flows.

Despite the positive international sentiment, the Indonesian market remained in negative territory throughout the trading day. All 11 IDX-IC sectoral indices closed lower, with the transportation and logistics sector experiencing the steepest decline. Investors are navigating a complex landscape of domestic political and economic factors alongside international developments.

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So, the decline in oil prices and reduced concerns over disruptions in the Strait of Hormuz also reduce pressure on inflation.