Jakarta. Indonesia’s benchmark stock index tumbled below the psychological 8,000 mark on Friday, dragged down by heavy profit-taking in conglomerate shares that had fueled the market’s rally through the third quarter. Analysts said overvalued blue-chip names and global jitters have triggered a rotation away from cyclical plays into safer assets.

The Jakarta Composite Index (JCI) dropped sharply as investors offloaded large-cap conglomerate stocks, ending a months-long euphoria that had driven valuations to record highs. JCI closed sharply lower by 209 points, or 2.57 percent, at 7,915, after moving between 7,854 and 8,140 throughout the session.

“We see the JCI correction as a mix of global uncertainty and profit-taking,” said Oktavianus Audi Kasmarandana, vice president for retail equity at Kiwoom Sekuritas. “Rising concerns over a potential US government shutdown, renewed US–China trade tensions, and persistent foreign outflows, particularly from major banks, have weighed on sentiment.”

Audi said investors are shifting toward defensive assets such as gold and government bonds as global risks mount. “There’s a clear sector rotation underway. In the short term, energy and basic materials may hold up, while over the medium to long term, financials, property, industrial, and telecom sectors remain attractive,” he said.

Muhammad Wafi, head of research at KISI Sekuritas, said conglomerate valuations had become too expensive after months of steep gains. “Investors are locking in profits as they see limited upside,” Wafi said. “This is a cooling-off phase rather than the start of a long-term bear market. The correction is a natural reaction after extreme rallies.”

He said that the index’s fall below 8,100 puts it at risk of testing key support levels between 7,950 and 7,900. “A technical rebound is still possible next week if foreign selling eases,” he said. Wafi added that investors are now rotating into the blue chip LQ45 stocks, including banks, consumer goods, telecom, and renewable energy firms.

Conglomerate Stocks Lead the Sell-Off

According to Abdul Haq Al-Faruqi, an analyst at Stocknow.id by Graha Sekuritas, the sharp sell-off in conglomerate names was the main driver of the JCI’s slide. “Conglomerate stocks like Chandra Daya Investasi (CDIA) and Petrindo Jaya Kreasi (CUAN), once the main movers of the index, are now dragging it lower as investors move into risk-off mode,” he said.

Foreign investors sold more than Rp100 billion worth of CDIA shares and over Rp50 billion in CUAN, according to Abdul. “The correction is justified. These stocks rose too quickly in recent months without matching improvements in fundamentals,” he said.

Tech shares also came under pressure, with DCI Indonesia (DCII) down 5.5 percent week-to-date and Solusi Sinergi Digital (WIFI) plunging nearly 30 percent. “It’s a classic ‘buy on rumor, sell on news’ reaction. After the telecom tender news broke, investors took profits as valuations looked stretched,” Abdul said.

The sell-off coincided with renewed trade friction between Washington and Beijing after the US administration threatened to impose tariffs of up to 100 percent on Chinese goods. A looming US government shutdown further rattled markets. “Global investors are holding back until there’s more clarity on US fiscal policy,” Abdul said.

Gold prices, which have surged over 30 percent year-to-date, reinforced the shift to safe-haven assets. Domestically, Antam gold hit Rp2.4 million per gram, up 11 percent this year. Analysts broadly agree that the “conglomerate era” in Indonesia’s stock market has reached its peak, giving way to a consolidation phase.

Still, many see room for recovery. “If foreign outflows stabilize and global monetary policy turns more accommodative, the JCI could reclaim the 8,000 level,” Wafi said.

Purbaya Plays Down the Dip
Finance Minister Purbaya Yudhi Sadewa called the market’s recent slide “normal” and not a cause for concern. “This is sentiment-driven. It’s fine. Brokers actually need volatility, if the market only rises, they can’t make trades,” he told reporters in Jakarta.

He said market fluctuations are a natural part of price discovery. “The tone shifts every two weeks, bad news, then good news. It’s all part of the cycle,” he quipped.

Purbaya added that the government remains focused on long-term fundamentals rather than short-term swings. “What matters is sustaining economic improvement. As companies grow more profitable, their market value will eventually follow,” he said.

He described the current correction as a “healthy pause” after a speculative surge. “Investors took profits after a long rally; they’ll buy again when prices dip. That’s normal. What’s important is that Indonesia’s economic fundamentals remain strong,” he said.