Record Highs Hold as Indonesia Stocks Extend Gains

Indonesia’s stock market jumped 135 points, or 1.9%, to 7,184 in early trade on the first trading day of April, rebounding from the prior session’s weakness as Wall Street’s rally overnight boosted risk appetite. Hopes of de-escalation in the Iran conflict mounted as the White House said President Trump will deliver an update on Iran in his address to the nation later today. Traders also welcomed reports that Jakarta has secured rice reserves of 4.3 million tons to guard against prolonged El Niño disruptions. However, gains were capped by caution ahead of domestic releases later today, including February trade and March inflation. Consumer prices rose 4.76% in February, marking a near three-year high above Bank Indonesia’s target, while January imports spiked ahead of the festive period. Strength was broad-based, led by cyclicals, basic materials, and industrials. Top movers included Unilever Indonesia (7.7%), Vale Indonesia (6.1%), Merdeka Copper Gold (4.5%), and Aneka Tambang (3.4%).

Indonesia’s IDX Composite edged down 17 points, or 0.2%, to 7,075 in Tuesday morning trade, marking a fourth consecutive decline as weakness in transport and financials weighed. Sentiment stayed cautious ahead of key domestic data releases, including March inflation and February trade figures. Inflation in February stood at 4.76%, a near three-year high and above Bank Indonesia’s target, while January imports surged ahead of Ramadan and Eid al-Fitr. Notable laggards included Perusahaan Gas Negara (-3.2%), Astra International (-2.4%), United Tractors (-2.2%), and Bank Negara Indonesia (-1.3%). For March, the market is on track for a third monthly drop, tumbling about 13.7% so far, pressured by internal and external headwinds, including escalating Middle East tensions, the rupiah weakness, and early signs of cost-push inflation, particularly in fuel-sensitive sectors like aviation. Meanwhile, equity breadth remains weak, underscoring heightened sensitivity to global developments.

Indonesian shares fell 90 points, or 1.2%, to 7,010 in Monday morning trade, marking a third straight decline as U.S. stock futures weakened amid the prolonged Middle East conflict, raising risks of inflation and global recession. Markets now imply 12bps of Fed tightening this year, a sharp shift from 50bps of cuts priced a month ago, Reuters reported. Caution also mounted ahead of key domestic releases this week, including March inflation and February trade data. Inflation rose to 4.76% in February, a near three-year high and above Bank Indonesia’s target. Meanwhile, January imports surged ahead of Ramadan and Eid al-Fitr, straining the trade balance. Still, losses were offset by new central bank measures to curb rupiah speculation, effective April 1st. Declines were broad-based, led by financials, cyclicals, and property. Among top laggards were MD Entertainment (-7.4%), Buana Lintas Lautan (-4.7%), Vale Indonesia (-4.7%), Chandra Asri Pacific (-4.5%), and Transcoal Pacific (-4.3%).