Jakarta Composite Index faces volatility amid Fed rate hikes

The Jakarta Composite Index (IHSG) has experienced significant volatility throughout mid-September 2026. After closing at 6,462 on Thursday, the index opened higher at 6,512 on Friday, though analysts noted potential for sideways movement or corrections.

Market performance has been heavily influenced by global monetary policy, specifically the United States Federal Reserve's decision to raise interest rates. J.P. Morgan Indonesia warned of near-term selling pressure as institutional investors de-risk emerging market portfolios in response to aggressive Fed hikes. This global tightening has contributed to capital outflows from Indonesia, totaling approximately Rp70.7 trillion as of mid-September.

Domestically, the market has seen varied sectoral performance. While consumer and energy sectors have provided support, large-cap stocks and the financial sector have occasionally acted as drags. Additionally, the Indonesian government is discussing revisions to the State Budget deficit limit, a move that could provide fiscal flexibility but carries risks regarding debt and interest burdens.