Jakarta. Indonesia’s benchmark stock index plunged at Monday’s open as the rupiah briefly weakened to Rp 17,600 per US dollar, adding to investor anxiety over rising US bond yields, renewed Middle East tensions, and fading hopes for aggressive Federal Reserve rate cuts.

Jakarta Composite Index (JCI) fell 94 points, or 1.4%, to 6,628 in early trading, extending losses after opening in the red within a range of 6,552 to 6,631.

RTI data showed 1.69 billion shares traded in the opening minutes, with transaction value reaching Rp 1.25 trillion ($71 million) across 161,744 trades. Losers heavily outnumbered gainers, with 415 stocks declining, 108 advancing, and 181 unchanged.

Brokerage firm Kiwoom Sekuritas Indonesia said global market sentiment remained under pressure due to fears of an economic slowdown and heightened volatility, particularly after broad weakness in technology and cyclical stocks.

“The pressure on semiconductor stocks has triggered another wave of risk-off action in the market, while investors have begun reducing expectations for aggressive Fed rate cuts,” Kiwoom said.

The brokerage added that soaring oil prices driven by geopolitical tensions had become a major concern for investors because they could fuel global inflation and narrow the room for monetary easing. Rising volatility, reflected in the higher VIX index, also indicated investors were shifting toward defensive assets while waiting for clearer signals on interest rates and geopolitical developments.

Phintraco Sekuritas projected the JCI would remain under pressure this week and potentially retest the crucial 6,700 level, citing concerns over rising US Treasury yields and escalating tensions between the US and Iran.

The brokerage also noted that markets were disappointed after a meeting between US President Donald Trump and Chinese President Xi Jinping ended without any major agreement.

“At the same time, yields on 30-year US Treasury bonds surged to 5.1% amid concerns over inflation and the possibility of higher interest rates due to rising crude oil prices,” Phintraco said.

Oil prices jumped more than 3% after the US and Iran failed to reach an agreement on geopolitical and global energy issues, according to the brokerage. Phintraco added that tensions between Washington and Tehran would likely continue influencing global markets throughout the week.

Kiwoom also highlighted pressure on the rupiah, which briefly weakened to Rp 17,600 per US dollar, reviving market concerns over capital outflows from emerging markets.

Despite the pressure, the government insisted current conditions were far different from the 1998 Asian financial crisis, arguing that Indonesia’s economic fundamentals remained solid. Authorities and Bank Indonesia were also continuing to strengthen fiscal and monetary coordination to stabilize the financial market, particularly the government bond market, to prevent deeper pressure on the rupiah and sovereign debt.

On the domestic front, the government decided to postpone a planned increase in royalties and export duties for the natural resources sector under the revision of Government Regulation No. 19/2025, citing global uncertainty and unstable conditions in the mining industry.

“From the market side, the postponement of the royalty increase tends to be positive short-term sentiment for coal, nickel, and mineral mining issuers because it can maintain stable cash flows and profit margins,” Kiwoom said.

“However, from the fiscal side, this policy could restrain non-tax state revenue growth, considering the natural resources sector still contributes around 46% of total national non-tax revenue,” it added.

Wall Street also closed sharply lower on Friday as rising oil prices rattled the bond market and triggered a global selloff in equities, particularly artificial intelligence-linked technology stocks.

The S&P 500 dropped 1.2% from its record high set a day earlier, while the Dow Jones Industrial Average lost 537 points, or 1.1%. The Nasdaq Composite slid 1.5% from its own all-time high.

Across Asia as of 9:16 a.m. Jakarta time, Japan’s Nikkei fell 1.18% to 60,680, while Hong Kong’s Hang Seng dropped 1.52% to 25,568. South Korea’s Kospi rose 0.62% to 7,539, and China’s Shanghai SSE edged up 0.16% to 4,142.