TEMPO.CO, Jakarta - The Jakarta Composite Index (JCI) of the Indonesia Stock Exchange (IDX) traded lower on Monday morning as market participants adopted a "wait-and-see" stance regarding the direction of the US Federal Reserve's benchmark interest rate policy this week.
The JCI opened down 7.51 points, or 0.11 percent, at 6,533.87. Meanwhile, the LQ45 index—comprising 45 blue-chip stocks—fell 0.74 points, or 0.11 percent, to 648.98.
"If the JCI fails to hold at 6,530, the correction could potentially extend toward 6,425, with the next support level at 6,377. Conversely, if it manages to rebound and break back above the 6,592 level, the JCI has the potential to test 6,723 before heading toward 6,859 as the next resistance level," said Liza Camelia Suryanata, Head of Research at Kiwoom Sekuritas Indonesia, in her analysis in Jakarta on Monday.
Regarding international developments, Liza noted that global market attention is focused on the US Federal Reserve's Federal Open Market Committee (FOMC) meeting scheduled for September 15–16, 2026.
Market participants anticipate that the Fed will raise its benchmark interest rate, given that US inflation data indicates persistent price pressures; US headline inflation reached 3.4 percent in August 2026, while rising consumer inflation expectations suggest that price pressures could remain elevated for longer.
Additionally, Liza mentioned that inflation concerns are weighing on market sentiment following a drop in the University of Michigan's Consumer Sentiment Index to 47.8 in September 2026—down from 51.7 in August and well below the expected 51.0.
"The decline was primarily driven by rising gasoline prices and trade tensions, which have heightened concerns regarding the cost of living," Liza said. Consequently, US consumer inflation expectations for the next 12 months rose to 4.6 percent from 4.0 percent, while five-year inflation expectations edged up to 3.4 percent from 3.3 percent.
"These conditions are keeping investors cautious ahead of the Federal Reserve's monetary policy decision this week," said Liza.
Meanwhile, geopolitical risks remain a concern for market participants, as the conflict between the US and Iran has sparked uncertainty regarding the security of energy trade routes in the Persian Gulf region.
However, sentiment improved slightly after Iranian state media reported plans for a meeting between Tehran and Gulf nations in Oman to discuss the Strait of Hormuz issue.
"This development helped ease pressure on oil prices following a sharp rally earlier in the week," Liza noted.
On the domestic front, tax revenue is projected to reach Rp1,409.1 trillion by August 2026—representing 59.8 percent of the 2026 state budget target—despite a 24.1 percent year-on-year (yoy) increase; this leaves approximately 40.2 percent of the target yet to be met in the final four months of the year.
Analysts at CITA consider the target overly ambitious, as the government requires an additional Rp440 trillion compared to the 2025 realization. Furthermore, a potential tax revenue shortfall of Rp80–140 trillion is anticipated if the backlog in tax refunds persists.
"This situation could strain business cash flows and hinder economic activity as well as job creation," Liza said.
Additionally, Liza noted that business expectations regarding macroeconomic conditions for the third quarter of 2026 have deteriorated, as reflected in the Macroeconomic Condition Expectation Index (IKM), which fell to 28 from 37 in the previous quarter, slipping into pessimistic territory.
"Businesses anticipate more moderate economic growth following the conclusion of seasonal factors such as Ramadan, Eid al-Fitr, and school holidays," Liza said. She added that pressure also stems from the potential weakening of the rupiah and rising inflation driven by high global energy prices, adjustments to non-subsidized fuel prices, rupiah depreciation, and El Niño-related risks to food prices.
“These conditions increase the likelihood of a pre-emptive BI-Rate hike to safeguard rupiah stability and anchor inflation expectations, even as manufacturing activity enters contraction territory, with the PMI falling to 49 in August 2026,” said Liza.
European markets closed higher across the board on Friday, Sept. 11; the Euro Stoxx 50 rose 0.90 percent, the UK’s FTSE 100 gained 0.39 percent, Germany’s DAX index climbed 0.80 percent, and France’s CAC 40 index advanced 0.78 percent.
US markets on Wall Street also closed higher across the board on Friday, Sept. 11; the S&P 500 index rose 0.86 percent to 7,656.98, the Nasdaq Composite gained 0.96 percent to 26,333.04, and the Dow Jones Industrial Average climbed 0.98 percent to 52,573.29.
Regarding Asian regional stock markets this morning: the Nikkei index fell 0.85 percent to 63,465.00, the Shanghai index rose 0.05 percent to 3,886.25, the Kospi index dropped 2.21 percent to 6,757.46, the Hang Seng index declined 0.35 percent to 24,719.00, and the Straits Times index rose 0.29 percent to 5,522.98.
