Jakarta stocks plunge 1.48% as political transition and risks weigh

JAKARTA, 26 AUGUST 2026 —

Jakarta Stocks Slump 1.48% as Investors Weigh BI Transition, Political Risks

The benchmark index shed 95 points during the session, swinging between a low of 6,405 and a high of 6,532. Trading activity was, with 42 billion shares changing hands, generating a turnover of Rp 18 trillion ($1 billion) across more than 2.5 million transactions. Declining stocks outnumbered gainers by a wide margin—583 to 118—while 89 issues ended unchanged.

The JCI had opened relatively stable, slipping just 4 points, or 0.07%, to 6,496 in early trading. Investors were initially monitoring developments in the Middle East, oil price trends, China’s policy outlook, Indonesia’s economic trajectory, and the planned transition in BI’s leadership.

Growth Assumptions and Fiscal Risks Pilarmas Investindo Sekuritas noted that investors were reassessing Indonesia’s growth prospects after Fitch Ratings described the government’s 6% economic growth assumption for 2027 in the draft 2027 state budget as “more realistic.” However, the ratings agency also highlighted several risks, including geopolitical uncertainty, elevated oil prices, and the potential for less disciplined fiscal policy, which could undermine the country’s ability to meet its growth target.

The market was closely watching the parliamentary fit-and-proper test for BI governor candidate Destry Damayanti, who is the sole nominee put forward by the government. Her confirmation hearing was scheduled for Wednesday.

“Market participants are awaiting the prospective governor’s views and strategy on monetary policy direction, inflation control, rupiah stability, and efforts to maintain foreign capital inflows,” Pilarmas said in a research note.

Political Stability in Focus Investors were also monitoring a planned demonstration at the MPR/DPR parliamentary complex on Thursday, which could include calls related to the passage of the Asset Forfeiture Bill. Political and social stability remain key concerns for investors, as shifts in the domestic landscape can directly influence market sentiment and investment decisions.

“Market participants hope the demonstration will proceed peacefully so that domestic security and stability can be maintained,” Pilarmas wrote.

Global Developments Ease Energy Concerns On the international front, signs of progress in Middle East peace talks provided some relief to financial markets. Pilarmas noted that negotiations aimed at easing the conflict have shown progress, reducing concerns over potential disruptions to energy supplies.

Pakistan reported significant progress in talks with Iran aimed at ending hostilities, while Iran and Oman discussed plans to establish a temporary transit corridor through the Strait of Hormuz, along with mine-clearing initiatives along the route. These developments contributed to lower oil prices, easing pressure on global inflation.

Investors were also awaiting signals from China’s National People’s Congress Standing Committee meeting, which runs from August 25–28. Markets are looking for fresh policy support following recent signs of economic weakness in several key indicators.

“Investors hope the Chinese government will again roll out policies to support economic growth,” Pilarmas said.

Regional Markets Mixed Elsewhere in Asia, regional equities showed mixed performance. Japan’s Nikkei rose 0.6% to 66,262, while South Korea’s Kospi jumped nearly 1%. Hong Kong’s Hang Seng gained 0.6%, and the Shanghai Composite also rose 0.6%.

Malaysia and Regional Impact For Malaysia, the decline in Indonesian equities may reinforce cautious sentiment among regional investors, particularly those with exposure to Indonesian assets or supply chains. The JCI’s drop reflects broader concerns over political transitions and policy continuity in Southeast Asia’s largest economy.

Analysts suggest that if BI’s leadership transition proceeds smoothly and Destry Damayanti’s policies are perceived as supportive of macroeconomic stability, investor confidence could gradually recover. However, lingering geopolitical risks and domestic political dynamics remain key variables.

Stakeholder Perspectives Pilarmas Investindo Sekuritas emphasized the need for clarity on BI’s policy direction, noting that investor confidence hinges on the central bank’s ability to manage inflation and maintain rupiah stability amid global headwinds.

“Market participants are closely watching how the new leadership will navigate these challenges,” the firm stated.

Forward-Looking Outlook Looking ahead, the JCI’s near-term direction will likely depend on several factors: the outcome of Destry Damayanti’s confirmation, the trajectory of oil prices, and the pace of policy adjustments in China. A smooth parliamentary process and peaceful demonstrations would help stabilize sentiment, while any escalation in geopolitical tensions could reignite volatility.

For now, investors remain cautious, balancing optimism over potential policy support with concerns over fiscal discipline and external risks. The market’s ability to regain footing will hinge on how these dynamics unfold in the coming weeks.

Related: Destry Damayanti · Jakarta