IHSG Drops 7.35 Percent, Away From Optimistic Target for Early 2026

The Composite Stock Price Index (JCI) moved away from the psychological area of ​​9,000 in trading Wednesday (28/1/2026). In fact, at the beginning of the year there was growing optimism that the domestic stock market had the opportunity to reach a higher level, even approaching 10,000.

Trade data shows that the JCI closed down 7.35 percent to 8,320.55. The selling pressure that occurred throughout the trading session caused the Indonesian Stock Exchange to implement a temporary suspension of trading for 30 minutes after the index fell by 8 percent in the second session.

This sharp weakening reflects the sudden increase in caution among market players. IDX management assesses that the correction that occurred was more triggered by external factors than short-term fundamental changes, in line with investors’ increasing emotional response to global developments.

The main pressure comes after the latest announcement from MSCI. Apart from changes to the free float calculation methodology, MSCI also decided to freeze the rebalancing process for Indonesian shares in February. This policy will last until next May, which means there will be no additions or reductions to Indonesian stock constituents in the MSCI index during that period.

This situation triggered a relatively simultaneous selling action, especially from investors who were sensitive to global index-based fund flows. In the midst of fragile market conditions, this decision became a catalyst for further correction.

On the other hand, there are also concerns regarding potential changes to the classification of the Indonesian market. MSCI opens the possibility of lowering the status of the domestic capital market from the Emerging Market category to Frontier Market if a number of structural improvements are not realized by the specified time limit. If this scenario occurs, Indonesia’s position will be on par with a number of regional markets which have more limited liquidity and market depth characteristics than major emerging market countries.

This condition contrasts with the optimism that emerged at the beginning of the year. The government previously assessed that the room for strengthening the IHSG was still wide open, in line with economic growth projections which were believed to be more solid than the previous year. This belief is one of the bases for the emergence of ambitious targets for index movements throughout 2026.

However, market developments show that global sentiment and the policies of international index institutions continue to have a significant influence on the direction of the JCI movement. In the short term, market players are still paying close attention to the regulator’s response and IDX’s further steps to reduce volatility and maintain investor confidence.