TEMPO.CO, Jakarta - The Jakarta Composite Index (JCI) continued its sharp correction on Thursday, falling more than 4 percent. This morning, the JCI fell 246.14 points, or 4.14 percent, to 5,694.91.
Capital market observer and Founder of Republik Investor, Hendra Wardana, believes the JCI's sharp correction indicates the market is facing a serious crisis of confidence.
"The JCI's sharp correction, which penetrated the psychological level of 6,000 and closed at 5,941 on June 3, 2026, signals that the market is experiencing a serious crisis of confidence," Hendra said in Jakarta on Thursday, June 4, 2026, as quoted by Antara.
According to him, the stock market weakening was not only influenced by external sentiment but was also exacerbated by a number of domestic factors.
The rupiah's weakening was influenced by concerns about the one-stop export policy and the continued outflow of foreign capital, which has prompted investors to reduce their investments in risky assets in Indonesia.
Hendra viewed this situation as a stark contrast, as most Asian stock markets were actually strengthening.
"This situation indicates that pressure on the domestic market stems more from internal factors than external ones," he explained.
He said the market tends to move based on perceptions of risk and future prospects, rather than solely influenced by optimistic statements about economic conditions.
When the Indonesian government conveyed that economic fundamentals remained strong, while the rupiah continued to weaken, the Jakarta Composite Index (JCI) became one of the worst-performing indices globally this year.
"Investor confidence is a very valuable asset. When policy certainty diminishes and market players have difficulty projecting the future direction of the economy, investors tend to choose to wait or even move their funds to other countries perceived as more stable," Hendra explained.
In terms of capital flows, Hendra noted that foreign investors again recorded net sales of around Rp864 billion in today's trading. Meanwhile, cumulatively since the beginning of the year, foreign funds leaving the Indonesian stock market have reached around Rp67 trillion. The magnitude of the capital outflow explains the ongoing selling pressure on large-cap stocks, which have been the mainstay of the index.
He estimates that market volatility will remain high as long as foreign capital outflows continue and there are no positive catalysts capable of restoring global investor confidence in the Indonesian market.
However, Hendra believes the current situation should not be overreacted. He sees that many leading stocks have experienced significant corrections, making their valuations attractive to long-term investors.
However, he cautioned that markets experiencing a crisis of sentiment often move irrationally in the short term.
"Therefore, it is possible that the JCI could experience further pressure and test the next psychological area around 5,800 to 6,000 before finally finding a new equilibrium and potentially making a gradual recovery," he said.
Read: JCI Slumps 5% as Rupiah Approaches Rp18,000 per US Dollar
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