The Indonesian stock market demonstrated remarkable resilience at the opening of trading on Friday (March 7), defying the broader downward trend in major Asian markets. The Jakarta Composite Index (IHSG) began the day with an increase of 31.97 points, or 0.48%, reaching 6,649.82. The LQ45 Index, which tracks 45 of the most liquid and fundamentally strong stocks on the Indonesian Stock Exchange (IDX), also saw modest gains, climbing 0.67 points or 0.09% to 754.16.
Despite the challenging global market conditions, analysts from Lotus Andalan Sekuritas expressed optimism regarding the IHSG’s potential for sustained upward movement throughout the trading session. The positive sentiment in the Indonesian market was supported by macroeconomic stability and investor confidence, particularly as the country awaited key economic data from Bank Indonesia (BI). The central bank was set to release its latest report on foreign exchange reserves, which were expected to remain stable, given the relatively steady exchange rate of the rupiah at around IDR 16,300 per US dollar. Additionally, the government’s strategic efforts to manage its financial obligations, including the repayment of IDR 800 trillion in maturing debt in 2025, have provided reassurance to investors.
The contrast between Indonesia’s market performance and the rest of Asia was stark. Major Asian indices experienced notable declines, reflecting concerns over economic growth prospects and ongoing geopolitical uncertainties. In Tokyo, the Nikkei 225 index recorded a sharp drop of 748.16 points, or 1.98%, bringing it down to 37,037.31. Investors in Japan reacted to weaker-than-expected corporate earnings and concerns over the potential impact of U.S. trade policies on the country’s export-driven economy. Meanwhile, China’s Shanghai Composite Index slipped 6.49 points, or 0.20%, to 3,310.44, as concerns over a slowing recovery in the world’s second-largest economy weighed on market sentiment. Malaysia’s Kuala Lumpur Composite Index also weakened, declining by 10.70 points, or 0.68%, to 1,560.69. The Singapore Straits Times Index, however, managed to defy the regional downturn, rising by 10.70 points, or 0.27%, to 3,898.22.
Global markets have been dealing with heightened volatility, driven by shifting trade policies and economic uncertainties. One of the key developments that captured investor attention was the latest decision by former U.S. President Donald Trump regarding trade tariffs. Earlier this week, the U.S. imposed a 25% tariff on goods from Canada and Mexico as part of the United States-Mexico-Canada Agreement (USMCA). However, in an unexpected policy shift, Trump announced a one-month exemption for Canadian and Mexican goods, initially granting the waiver only to Mexico before extending it to Canada. The move was seen as an attempt to ease tensions with major trading partners but also added an element of unpredictability to U.S. trade policy.
In Europe, stock markets managed to recover from early losses and closed the previous trading session on a stable note. Investors responded to the European Central Bank’s (ECB) decision to cut interest rates in line with expectations. The ECB also signaled its willingness to introduce further monetary easing measures to support economic growth and ensure inflation remains within target levels. This announcement provided some reassurance to the European markets, which had been grappling with uncertainty over inflationary pressures and the potential impact of slowing economic activity.
Over in the United States, Wall Street faced significant losses on Thursday (March 6), with the Nasdaq Composite Index officially entering a correction phase for the first time since December. The sell-off was fueled by persistent concerns about trade policy uncertainty and its effect on corporate earnings. The Dow Jones Industrial Average plunged by 427.51 points, or 0.99%, closing at 42,579.08. The S&P 500 declined by 104.11 points, or 1.78%, ending the session at 5,738.52, while the Nasdaq Composite suffered the steepest drop, falling 483.48 points, or 2.61%, to 18,069.26.
As financial markets navigate a challenging global environment, Indonesia’s IHSG stands out as a rare bright spot in the region. With strong domestic fundamentals, stable economic indicators, and strategic policy measures in place, the country’s stock market continues to attract investor confidence, even as global uncertainties persist.
