Jakarta. The Jakarta Composite Index (JCI) rebounded on Tuesday morning, rising 0.88 percent to 7,122.1, after suffering a sharp 3.4 percent decline the previous day, marking its worst daily drop since May 2022. The Nikkei, which had also plunged 12 percent, rebounded by nearly 11 percent.

Japan’s benchmark Nikkei 225 share index soared as much as 10.7 percent early Tuesday. The Bank of Japan's recent decision to raise its main interest rate from nearly zero boosted the value of the Japanese yen but also led traders to exit deals where they had borrowed money cheaply in Japan and invested it globally.

Elsewhere in Asia, Hong Kong's Hang Seng index rose 1.1 percent to 16,876.98, the Kospi jumped 3.5 percent to 2,526.20, Taiwan's Taiex climbed 1.2 percent, and Australia's S&P/ASX 200 edged 0.3 percent higher to 7,675.90. The Shanghai Composite index, largely unaffected by the previous day's turmoil, increased by 0.2 percent to 2,865.06.

Monday's market meltdowns reflected fears that prolonged high interest rates had severely damaged the economy, potentially forcing the Federal Reserve to cut rates in an emergency meeting before its next scheduled decision on September 18. 

Phintraco Sekuritas attributed Monday's JCI decline to panic selling following a global and regional market sell-off triggered by negative sentiments such as rising US unemployment, the Bank of Japan's monetary policy tightening, and the risk of full-scale war in the Middle East.

"These conditions caused panic in the Indonesian capital market. However, recent domestic economic data is relatively solid, with economic growth realization at 5.05 percent year-on-year in Q2 2024, higher than the 5 percent year-on-year expectation," Phintraco Sekuritas' research stated on Tuesday.

Furthermore, the escalation of conflicts has driven up coal prices, which is relatively beneficial for Indonesia. As long as oil prices fluctuate around $80 per barrel, there is no direct negative impact on Indonesia.

Therefore, Phintraco forecasts a potential technical rebound for JCI to the range of 7,100-7,120 on Tuesday.