Jakarta. President Prabowo Subianto is seeking to reassure investors after the Jakarta Composite Index (JCI) nosedived 6 percent in a single session, triggering concerns over market stability. A meeting with investors is being arranged as part of efforts to restore confidence.

The JCI tumbled 395.8 points to 6,076 during Tuesday's trading, prompting government officials to respond. The plan for the meeting was disclosed by Luhut Binsar Pandjaitan, chairman of the National Economic Council.

"The President will meet with market investors," Luhut said at the Presidential Palace complex in Jakarta on Wednesday.

Details on the timing and location of the meeting remain unclear, as Cabinet Secretary Teddy Indra Wijaya is coordinating arrangements, Luhut added.

On Tuesday, the Indonesia Stock Exchange (IDX) halted trading at 11:19 a.m. local time for 30 minutes as the index breached the 5 percent decline threshold. However, the JCI rebounded on Wednesday, with IDX reporting a 1.42 percent gain, pushing the benchmark index up 88 points to close at 6,311.

The recovery was partly driven by an intervention from the Financial Services Authority (OJK), which announced a policy allowing share buybacks without shareholder approval, aiming to stabilize market sentiment.

Luhut downplayed concerns over the JCI’s sharp drop, arguing that such volatility is a normal occurrence in financial markets. He also noted that the index had already begun to recover as of Wednesday’s session.

"The President remains cautious regarding fiscal discipline, ensuring that everything is well calculated," Luhut said.

The sharp decline in JCI fueled concerns over weakening investor confidence, though government officials have sought to reassure the market.

“A drop of more than 5 percent signals that Indonesia’s economy is under significant pressure,” Hendra Wardana, founder of Stocknow.id. “Foreign investors are increasingly cautious, although markets are cyclical, and a rebound is possible if economic policies stabilize.”

Investor sentiment has deteriorated as foreign funds continue to exit Southeast Asia’s largest economy. Year-to-date, net foreign outflows have reached more than Rp 26 trillion ($1.58 billion), with the JCI down more than 8.5 percent year-to-date.

Analysts cite mass layoffs before Eid and concerns over upcoming credit ratings from Fitch, S&P, and Moody’s. Downgrades by Goldman Sachs and Morgan Stanley due to fiscal risks from President Prabowo’s policies have further hurt confidence.

As of February, Indonesia’s budget deficit stood at Rp 31.2 trillion, while debt servicing costs soared to Rp 79.3 trillion in the first two months of 2025. Rising debt burdens could constrain government spending, limiting economic stimulus measures.

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