Azernews.Az

By Alimat Aliyeva

Indonesia’s Jakarta Composite Index (JCI) fell sharply by around 4% at Monday’s market open, following an extended holiday break that amplified early trading volatility, AzerNEWS reports, citing foreign media.

At the same time, the Indonesian rupiah briefly hit a record low of around 17,601 against the U.S. dollar in recent days before recovering slightly to about 17,583, according to central bank exchange rate data.

Analysts attribute the downturn to a combination of external pressures, including a stronger U.S. dollar, continued foreign capital outflows, rising global oil prices, and growing concerns about a potential slowdown in the world economy. These factors have collectively weighed on emerging markets, including Indonesia, local media reported.

Market participants warn that the JCI may remain under pressure in the near term if global risk-off sentiment persists and investors continue to move toward safer assets such as U.S. Treasuries and gold.

Interestingly, some economists note that Indonesia’s market sensitivity is also linked to its heavy reliance on commodity exports such as palm oil, coal, and nickel. This makes the index particularly reactive to shifts in global industrial demand and energy prices—meaning even small changes in China’s or the U.S. manufacturing outlook can quickly ripple through Jakarta’s financial markets.