Jakarta. The Jakarta Composite Index (JCI) fell sharply by 2 percent to 6,513 on Tuesday, marking its lowest level in over 18 months. Blue-chip stocks tracked by the LQ45 index dropped 1.8 percent, while nearly all sectors closed in the red, led by infrastructure (-4 percent), energy (-2.7 percent), and transportation (-2.4 percent).

The market slump comes amid persistent global economic uncertainties and declining investor confidence in Indonesia’s investment climate, analysts said. Foreign investors have been pulling out, with a year-to-date foreign net sell position reaching nearly Rp 8 trillion. The rupiah remained flat at Rp 16,300/USD.

"Time to Buy," Says Indonesia Stock Exchange Chief

Despite the bearish sentiment, Indonesia Stock Exchange (IDX) CEO Iman Rachman urged investors to consider buying opportunities. "This is the right time to accumulate blue-chip stocks that have been oversold. We are talking about long-term investments, not short-term gains," Iman told reporters at the Jakarta Convention Center (JCC) on Tuesday.

Iman acknowledged that factors driving the market downturn are beyond the bourse's control. “Index movements are influenced by multiple factors, many of which are external. We’ll continue to monitor developments,” he added.

Amid market turbulence, Bank Indonesia's Consumer Confidence Index (CCI) for January 2025 indicated sustained optimism, coming in at 127.2. The index was supported by strong readings in the Consumer Expectation Index (CEI) at 140.8, an improvement from December’s 139.5, according to Executive Director Ramdan Denny Prakoso.

“This reflects confidence in the strength of Indonesia’s economy,” Denny noted in a statement. 

Analysts at NH Korindo Sekuritas Indonesia maintained a "wait-and-see" stance, citing the lack of conducive market conditions for foreign investments and weak corporate governance. The ongoing FY24 earnings season may offer some relief if strong results surface, but broader market sentiment remains fragile.

“Investors should remain cautious and only consider buying on weakness once clearer positive catalysts emerge,” NHKSI Research advised in a note.

Global Factors Add to Market Volatility

Asian markets also struggled on Tuesday after US President Donald Trump announced a 25 percent tariff on steel and aluminum imports. The Hang Seng Index fell 0.87 percent, while the Shanghai Composite dipped 0.12 percent. Japan’s markets were closed for a public holiday, and South Korea’s KOSPI edged up 0.71 percent.

US futures also declined, with Dow Jones futures slipping 82 points (-0.18 percent), S&P 500 futures down 0.28 percent, and Nasdaq futures falling 0.36 percent. Gold prices surged to another record high of $2,930 per ounce as investors sought safe-haven assets amid tariff-related concerns.