Indonesia Equity Market Recap - July 2026
Best monthly performance since 2009 on market capitulation
The Indonesian stock market just posted its best July performance since 2009, with the Jakarta Composite Index (JCI) increasing +10.5% MoM and reversing six consecutive months of losses, although it is still down -28% this year.
Technically, it marked the first time this year that JCI did not make a lower low. The trough came at 5,300 in Jun-26, prompting the government to “panic” and signal support for the equity market through stock buybacks and reforms.
USD/IDR at 18,200 also appears to be the government’s “pain” threshold. Since then, it has normalized yield curves, increased interest rates by 100bps in 3 months and lowered hedging costs to attract capital inflows and support the currency.
Thus, July reflected capitulation and tactical buying amid cheap valuations and light positioning. However, investors remain cautious as Indonesia still lacks strong structural upside catalysts and policy direction is uncertain.
