Indonesian stocks open lower as market watches protests

The Indonesian Stock Exchange Composite Index (IHSG) began Thursday's trading session on a subdued note, opening lower as market participants closely monitor a confluence of global and domestic sentiments. The benchmark index dipped 15.34 points, or 0.24 percent, to 6,390.35, while the LQ45 index of leading stocks fell 0.39 percent to 630.08.

Analysts at Phintraco Sekuritas project the IHSG to trade within a range of 6,350 to 6,450 for the day. Global economic indicators are playing a significant role, with the US Personal Consumption Expenditures (PCE) inflation data for July 2026 coming in slightly above expectations at 3.7 percent year-on-year. This, coupled with a 0.2 percent monthly increase in the PCE index, has bolstered expectations that the Federal Reserve may maintain its interest rates, as reflected in the CME FedWatch Tool, which shows an increased probability of a September rate hold.

Further global pressures include investor anticipation of Nvidia's quarterly earnings report and heightened geopolitical tensions stemming from reports that Russia plans to intensify its attacks on Ukraine, following the perceived deadlock in peace negotiations. The weakening of spot gold prices is also attributed to the higher-than-expected US inflation data, which increases the likelihood of further Fed rate hikes.

Domestically, market sentiment is being weighed down by the ongoing protests near the Indonesian parliament complex. This situation introduces a potential short-term risk for the stock market, prompting investors to adopt a cautious 'wait and see' strategy. Should the demonstrations proceed peacefully, there is a possibility of renewed buying activity. Concurrently, Bank Indonesia is enhancing its oversight of foreign exchange traffic through technological advancements to manage increasingly complex cross-border transactions and potential under-invoicing in export activities.