Indah Handayani, Jakarta – Indonesia's benchmark stock index fell sharply on Friday as escalating unrest in Jakarta weighed heavily on investor sentiment. The Jakarta Composite Index (IHSG) dropped 1.73 percent to 7,815.34 in the midday session, reflecting growing concerns over political and security instability.
Tensions escalated after a motorcycle taxi driver was killed in Jakarta when struck by a police armored vehicle deployed to control protests, further fueling public anger.
Market analyst Hendra Wardana of Stocknow said the decline highlights the fragility of market psychology in the face of domestic turmoil. "As soon as potential security risks emerge, both foreign and domestic investors tend to hold back or even sell off portfolios to secure liquidity," he explained.
Protests that have gripped Jakarta and spread to other regions have increased political uncertainty, a key risk for markets highly sensitive to stability. Hendra added that the government's response has only deepened concerns.
"Instead of open dialogue with the public, the decision to advise lawmakers to work from home has created the perception that leaders are distancing themselves from citizens. Markets need signals of stability, and perception often matters more than reality," he said.
The sell-off was broad-based: 625 stocks declined, 100 advanced, and 71 were unchanged. Trading value reached Rp 9.6 trillion ($583 million).