The weakening and strengthening of Rupiah have affected the price of Indonesia Composite Stock Price Index (IHSG). Yesterday, when Rupiah strengthened from 14,000 to 13,995 the price of IHSG also rose to 6,078.87 from 5,963.47. Today, when Rupiah is back to 14,000, the price of IHSG is falling to 6,030.056 in the opening of the day. These fluctuations are expected to happen until June, where the Fed also scheduled their Federal Open Market Committee (FOMC) meeting to increase the FFR (Fed Fund Rate). The effect can be seen from the past, when United States increased their yield rate to 3% the exchange in emerging markets responded extremely.
There are also other reasons of these fluctuations, rebalancing and Eid holidays. The Fed meeting will be held at 13 of June which is a holiday in Indonesia and thus many investors may choose to wait and see. Because they are unable to price the yield in holiday. Eid holidays will also affect the demand of dollar. On holidays the demand of dollars is expected to be lower than the active days. This will affect the value of Rupiah and hence the price of stocks.
Related to the condition above and Eid Fitr, consumer related sector will be a good investment. Following Eid Fitr, the price of consumer related sector will likely fall since there are high demand from people to consume. After this period is over the price will increase back and give a good opportunity investment.