JAKARTA — A combination of renewed trade restrictions, higher energy prices and profit-taking brought Indonesia’s recent equity-market recovery to an abrupt pause on Friday.

The Jakarta Composite Index declined 1.88% to 6,196.43 on July 24, 2026. The LQ45 index of major liquid stocks fell 1.97%.

Selling was broad. A total of 587 shares finished lower, while only 104 advanced and 105 were unchanged. The market breadth indicated that the decline extended beyond a limited group of index heavyweights.

The reversal followed a week in which the benchmark had briefly moved above 6,400. That earlier advance left the market vulnerable to profit-taking when the global outlook deteriorated.

A New Tariff Regime Replaces the Temporary Levy

The United States imposed tariffs of 10% or 12.5% on imports from 60 trading partners as an earlier temporary global levy expired.

The Trump administration said the action followed investigations into whether other economies had established and effectively enforced bans on imports produced with forced labour.

Indonesia was assigned the lower 10% rate. Washington said the country had adopted or committed to certain forced-labour import restrictions but had not yet enforced them sufficiently.

The measures were imposed under Section 301 of the Trade Act of 1974. They represent an attempt to restore a broad US tariff structure after the Supreme Court struck down earlier duties that had been introduced through emergency-powers legislation.

The new tariffs cover almost all US imports, although exemptions apply to categories including oil, gas, fertiliser and selected food products.

For Indonesian companies, the immediate commercial effect will vary. Exporters may face lower margins, weaker demand or pressure to adjust supply chains, while exemptions may reduce the impact on some industries.

The policy also adds a wider market risk by increasing uncertainty over global trade, investment and corporate earnings.

Oil’s Move Above US$100 Changed the Market Narrative

The tariff announcement coincided with another major risk: crude oil’s return above US$100 per barrel.

Brent settled above that threshold in the previous session after Iran-aligned Houthi forces said they had attacked two Saudi tankers in the Red Sea.

Prices retreated on Friday, falling to approximately US$97. Brent nevertheless remained on course for a weekly increase of more than 10%.

The significance of the move lies in the growing number of threatened shipping routes.

Earlier disruption had centred on the Strait of Hormuz. Attacks in the Red Sea have now increased concern about Bab el-Mandeb, another strategically important passage connecting Asian energy shipments with the Suez Canal and Europe.

If both routes become unreliable, tankers may need to travel around Africa. Longer journeys would increase transport, insurance and chartering expenses while reducing the effective availability of ships.

The Inflation Risk Matters More Than the Daily Oil Price

Brent’s retreat below US$100 did not immediately restore confidence because investors were assessing the economic consequences of a prolonged supply shock.

Higher energy costs can feed through to transport, manufacturing, electricity and food distribution. That transmission may keep inflation above central-bank targets even if underlying demand weakens.

Global bond yields rose as traders increased their expectations that major central banks would maintain restrictive policy for longer. Markets have also begun to consider the possibility of additional Federal Reserve tightening if the oil shock becomes persistent.

Higher US yields create competition for capital. Emerging-market assets become relatively less attractive when investors can earn larger returns from dollar-denominated government securities.

Indonesia faces an additional channel of pressure because it is a net oil importer. Expensive crude can increase demand for foreign currency, weaken the trade balance and raise the fiscal cost of fuel subsidies or compensation.

Profit-Taking Amplified the External Shock

Phintraco Sekuritas interpreted Friday’s move partly as profit-taking after the benchmark’s recent rally.

The cyclical-consumer sector recorded the deepest decline, falling approximately 3.04%. Basic materials lost 3.02%, while energy stocks dropped 2.82%.

The weakness in energy shares may initially appear counterintuitive because higher crude prices can support producer revenues.

Market performance, however, also reflects valuation and positioning. Stocks that had already advanced can fall when investors lock in gains, while concern about inflation and slower economic growth can outweigh the direct benefit of higher commodity prices.

Among LQ45 stocks, Petrindo Jaya Kreasi declined 7.28%, Bumi Resources fell 6.56%, and Darma Henwa lost 6.36%.

Technical Momentum Has Begun to Deteriorate

The index closed below its five-day moving average but remained above the ten-day average.

This configuration suggests that the most recent bullish momentum has weakened, although the broader short-term recovery has not been completely invalidated.

Phintraco noted that the positive MACD histogram continued to narrow. The Stochastic RSI also reversed toward its pivot area, indicating that buying pressure was losing strength.

If oil remains elevated, the research house expects the index to test the 6,000–6,100 region during the following week.

That range would represent a further decline from Friday’s close and may become the next area in which buyers attempt to stabilise the market.

What Could Determine the Next Direction

The Indonesian market now faces a more complicated environment than it did at the beginning of the rally.

Domestic valuations may remain attractive, but they must compete with higher global bond yields and renewed demand for the US dollar. Corporate earnings expectations may also need to account for more expensive energy and weaker trade conditions.

Several developments could help reduce the pressure:

A decline in oil prices would ease concerns about inflation and Indonesia’s import bill. Diplomatic progress in the Middle East could lower the geopolitical risk premium. Clarification or negotiation over US tariffs could reduce uncertainty for exporters.

The opposite outcomes would increase the probability that foreign investors reduce emerging-market exposure and that the JCI tests lower support levels.

Friday’s decline therefore represented more than an ordinary end-of-week correction. It showed how quickly Indonesia’s market can react when trade restrictions, geopolitical conflict and global monetary concerns occur simultaneously.

Disclaimer: This article is provided solely for informational and educational purposes. The market analysis, technical levels and securities mentioned do not constitute personalised financial advice, a recommendation or an invitation to buy or sell any investment.