KONTAN.CO.ID – JAKARTA. The Jakarta Composite Index (IHSG) is expected to demonstrate restricted movement in the short term, following significant downward pressure experienced just before the recent long holiday.
While some analysts suggest that opportunities for a technical rebound remain open, they caution that the underlying weakening trend has not yet fully subsided.
Capital market observer Irwan Ariston highlighted that, from a technical standpoint, the IHSG’s direction remains predominantly bearish. “The technical movement of the IHSG is still bearish, although a technical rebound—a temporary uptick—could occur before downward pressure re-emerges,” Irwan told Kontan on Friday (May 15, 2026).
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He further elaborated that a combination of external and domestic factors continues to weigh heavily on the market. Beyond the impact of MSCI rebalancing, the weakening of the rupiah exchange rate, hovering around Rp17,500 per US dollar, is also contributing to negative sentiment.
“Apart from the MSCI influence, the current rupiah exchange rate, at approximately Rp17,500 per USD, is having its own distinct negative effect,” he explained.
Irwan also brought attention to crucial non-economic factors, particularly the perceived lack of legal certainty within the country, which he believes can significantly erode investor confidence. “The absence of justice and legal certainty like this severely undermines the foundation of investment trust. Sooner or later, this could further exacerbate an already challenging situation,” he warned.
Turning to global index pressures, Co-Founder of PasarDana, Hans Kwee, observed that market strain is being fueled by a confluence of global sentiments. These range from escalating oil prices to the potential for a “higher-for-longer” interest rate policy in the United States.
“Persistent and rising US inflation, driven by oil prices, is diminishing hopes of any imminent interest rate cuts by the Federal Reserve,” Hans clarified. He added that the surge in US bond yields is simultaneously bolstering the strength of the US dollar and exerting downward pressure on emerging markets, including Indonesia.
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Given these conditions, the IHSG is projected to enter a consolidation phase, with a tendency for limited strengthening at the start of the week. “The IHSG has the potential to consolidate and strengthen, with support levels at 6,600-6,700 and resistance levels at 6,800-6,977,” Hans detailed.
Meanwhile, the MSCI rebalancing remains a significant point of interest, particularly concerning stocks slated for removal from the index, such as AMMN, BREN, TPIA, DSSA, CUAN, and AMRT. Irwan anticipates that pressure on these specific stocks is likely to persist in the short term.
“There will be pressure on the stocks being excluded from that index. However, given the relatively small public ownership, their movement will largely depend on the actions of majority shareholders,” he revealed. He added that this pressure could potentially continue until the end of May, when the official index changes take effect. “After that, it may or may not continue; it all depends on the discretion of the majority shareholders,” he concluded.
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In a market environment still fraught with uncertainty, investors are advised to adopt a more selective approach. Irwan underscored the importance of focusing on companies with strong fundamentals and still-attractive valuations. “Long-term investors should prioritize stocks with good fundamentals, characterized by a PER below 7 times and a PBV below 0.7 times,” he recommended.
He also counseled investors to maintain sufficient portfolio liquidity. “Always keep at least 50% cash in your portfolio if you are just about to enter the market, to anticipate potentially worse situations in the future,” he added.
From a sectoral perspective, investment opportunities are heavily contingent on the overall state of economic fundamentals. Should economic pressures continue, nearly all sectors are likely to feel the adverse impact. “In truth, all sectors are quite appealing when our economic fundamentals are sound. But when economic fundamentals show signs of danger, then almost all sectors become uninteresting,” Irwan concluded.
Summary
The Jakarta Composite Index (IHSG) is anticipated to experience restricted and predominantly bearish movement, although a temporary technical rebound remains possible. This downward pressure stems from a combination of factors, including the impact of MSCI rebalancing, the weakening rupiah exchange rate around Rp17,500 per US dollar, and concerns over legal certainty. Additionally, global sentiments such as rising oil prices, persistent US inflation potentially leading to “higher-for-longer” US interest rates, and surging US bond yields are strengthening the US dollar and exerting pressure on emerging markets.
Pressure is expected to continue on stocks slated for removal from the MSCI index, like AMMN and BREN, potentially until late May. Despite these challenges, the IHSG is projected to enter a consolidation phase with limited potential for strengthening, with identified support and resistance levels. Investors are advised to adopt a selective approach, focusing on companies with strong fundamentals and attractive valuations, while also maintaining adequate cash liquidity in their portfolios.