Indonesian stocks suffered a significant downturn Wednesday, with teh Jakarta Composite Index (IHSG) closing down 6.76% amid growing investor anxiety. The sell-off was spurred by concerns over potential political interference at Bank Indonesia (BI) following the recent appointment of President-elect Prabowo Subianto’s nephew, Thomas Djiwandono, as a Deputy Governor[[1]]. Economists warn that erosion of the central bank’s independence could trigger capital flight and undermine confidence in the Southeast Asian nation’s economic governance[[2]].
KABARBURSA.COM – Indonesia’s benchmark stock index plunged sharply Wednesday, January 28, 2026, as investor concerns mounted over the nation’s economic policies. The Jakarta Composite Index (IHSG) opened lower and quickly fell 6.76%, closing at 8,372.77, a drop of 607.46 points.
The sell-off reflects a broad risk-off sentiment in the Indonesian stock market, triggered by anxieties surrounding the independence of Bank Indonesia (BI). The IHSG opened at 8,393.51, reaching a high of 8,397.60 and a low of 8,349.66 during the early trading session.
Trading volume totaled 40.33 million lots, with a transaction value of Rp2.66 trillion (approximately $167 million USD) across roughly 213,930 transactions. Foreign investors were net sellers, with purchases totaling Rp8.94 trillion and sales reaching Rp10.56 trillion, resulting in a net foreign sell of Rp1.61 trillion in the overall market and Rp1.65 trillion in regular market trading.
However, cash and negotiated transactions saw a net foreign buy of Rp38.60 billion. Domestic investors accounted for 64.53% of trading activity, while foreign investors represented 35.47%.
The downturn impacted all sectors, with energy leading the decline, falling 9.26%. Infrastructure followed, dropping 7.34%, and technology decreased by 6.92%. The raw materials sector fell 6.41%, property declined 5.09%, industry decreased 4.86%, and cyclical consumer goods lost 4.82%. Financials, transportation, and healthcare sectors also experienced losses, down 2.99%, 2.47%, and 3.11% respectively. The non-cyclical consumer goods sector proved the most resilient, with a comparatively smaller decline of 1.62%.
Despite the overall negative trend, some stocks posted gains. PT Wahana Pronatural Tbk (WAPO), a trading company, led the gainers, surging 28.72% to 242. PT Buana Artha Anugerah Tbk (STAR), from the financial sector, rose 14.40% to 715, and PT Jantra Grupo Indonesia Tbk (KAQI), a technology firm, increased 11.25% to 89. PT Pudjiadi & Sons Tbk (PNSE), a property company, gained 9.59% to 800, while PT Bangun Karya Perkasa Jaya Tbk (KRYA), in the construction sector, added 5.77% to 110.
Conversely, significant selling pressure drove several stocks to the bottom of the list of performers. PT Artha Mahiya Investama Tbk (AIMS), a property company, fell 15.00% to 595. PT Bukit Uluwatu Villa Tbk (BUVA), in the tourism sector, also plummeted 15.00% to 1,445. PT Dian Swastatika Sentosa Tbk (DSSA), an energy company, corrected 15.00% to 98,600, while PT Impack Pratama Industri Tbk (IMPC), in the raw materials sector, dropped 15.00% to 3,060. PT Kawasan Industri Jababeka Tbk (KIJA), a property firm, weakened 15.00% to 238.
The market’s reaction is linked to concerns about economic policy governance, particularly following the appointment of Thomas Djiwandono, nephew of President-elect Prabowo Subianto, as a Deputy Governor of Bank Indonesia. There are also reports of a potential exchange with Juda Agung, the previous Deputy Governor, who may be appointed as Deputy Minister of Finance.
“This is certainly a violation of good economic governance,” said Noval Adib, an economist and lecturer at the Department of Accounting at Brawijaya University. “Investor confidence is declining because control of fiscal and monetary policy is being consolidated.”
Adib explained that monetary policy, which should act as a check on fiscal policy, is now seen as a tool to support it. “The red opening of the IHSG this morning, and its continued decline, reflects this lack of investor confidence,” he stated. Investors are increasingly viewing the risk of investing in Indonesia as higher when the central bank’s independence is compromised.
“The potential for capital outflow is increasing because investors see the investment environment in Indonesia becoming less conducive when the economy is not managed with good governance,” Adib added.
Technical analysis from MNCS Daily Scope Wave, dated January 28, 2026, indicates the IHSG briefly gained 0.05% to 8,980 with increased buying volume, but remains within wave [iv] of wave 5, making it vulnerable to further correction. The expected correction range is between 8,708 and 8,790, with support levels at 8,852 and 8,816. Resistance levels are seen at 9,039 and 9,120, with limited potential for gains between 8,992 and 9,018.
