The Indonesia Stock Exchange (IDX) Composite index is expected to rebound in the second half as easing MSCI concerns, fiscal stimulus and attractive valuations lift investor sentiment, but policy uncertainty and external risks could temper gains.
A group of visitors take a photo on Jan. 29 in front of a stock ticker display at the Indonesia Stock Exchange (IDX) in South Jakarta. (AFP/Yasuyoshi Chiba)
The Indonesia Stock Exchange (IDX) Composite index is expected to recover in the second half of 2026 after posting one of the weakest performances among global markets in the year's first six months, with analysts pointing to easing concerns over Indonesia's standing in MSCI indexes, attractive valuations and a revival in initial public offerings (IPOs) as factors that could help restore investor confidence.The index fell about 35 percent in the first half, weighed down by foreign capital outflows, a weakening rupiah, rising bond yields and concerns over government policy direction.
It was down around 32 percent year-to-date at 5,873.37 points on Wednesday after dropping 1.89 percent from the previous day amid a new flare-up of violence in the Middle East and after S&P Dow Jones Indices (DJI) announced it put Indonesia on a watch list for a potential downgrade to frontier market status in its 2027 annual review.
