Analysts Reveal Trigger Factors for IHSG's 2.15% Jump Today, Will It Continue?

JAKARTA, investortrust.id – The easing of tariff war tensions between the United States (US) and China, as indicated by the reduction in import tariffs, is the main factor supporting the jump in the composite stock price index (IHSG) of the Indonesia Stock Exchange (IDX) by 147.08 points (2.15%) to 6,979.

The US previously unilaterally set high trade tariffs on trading partners, especially China. However, since last weekend the US has shown a softer stance after going through intensive negotiations held in Geneva-Switzerland for 2 days on Saturday to Sunday (10-11/05/2025).

In the agreement, the US agreed to reduce tariffs on imported products from China by 145% to 30%, while China also reduced tariffs for various products from the US to 10% from the previous 125%.

BNI Asset Management Chief Investment Officer Farash Farich said that the easing of US-China trade war tensions would have a positive impact on the world capital market, including the JCI, potentially improving and continuing to strengthen since its lowest point this year occurred in early April.

"The Indonesian stock market was seen strengthening this morning, reflected in the strengthening of the JCI to the level of 6,948.9 led by the infrastructure sector, energy and transportation sectors and the negative sector was in the technology sector," said Farash in his statement in Jakarta, Wednesday, (14/5/2025).

According to him, the US-China trade tariffs provide positive sentiment for investors, although it is not a final settlement. As conveyed by Scott Bessent, US Treasury Secretary, this is a pause to prevent long-term damage from the trade war, because a full agreement may take 2-3 years as happened in the previous US-China Trade War experience.

Farash added that this agreement shows that the US-China Government is being pragmatic, compared to the previous attitude in early April 2025. The governments of both countries are now more responsive to concerns about the economic impact of tariff increases that could increase the risk of slowing economic growth in both countries and globally. Thus, this temporary trade war agreement still provides positive sentiment for the market.

"The Indonesian stock market is in a position to benefit from this development. The JCI valuation, based on the price-to-earning ratio, is still below minus 1 standard deviation, compared to its historical average and lower than the historical average of the stock market valuations of developing countries in Asia. In addition, the portion of foreign ownership in our stock market is the lowest in the last 10 years," explained Farash.

Meanwhile, technically, MNC Sekuritas Analyst, Herditya Wicaksana alias Didit observed that the JCI movement still tends to be uptrend since April 2025, according to him the JCI movement is still dominated by purchase volume.

"We estimate that the JCI still has the opportunity to strengthen with support at 6,970 and resistance at 7,029, looking at the MACD which is sloping in the positive area and the Stochastic which is still in the overbought area," said Didit to investortrust.id Wednesday, (14/5/2025).