Indonesia Equities Under Pressure After Fitch Outlook Cut

Indonesian equities rose 25 points, or 0.4%, to 7,644 in early Friday trade, snapping two sessions of weakness as U.S. futures firmed after Wall Street hit fresh records on optimism the Middle East conflict may ease after Israel agreed to a temporary ceasefire with Lebanon and U.S. Local markets are heading for a second straight weekly gain, up 2.3% so far, supported by Finance Minister Purbaya Yudhi Sadewa’s remarks that U.S. investors favor portfolio flows, bonds and equities, over long-term direct investment in Indonesia. He spoke after meeting 18 investors in Washington, including Goldman Sachs and Fidelity. Purbaya also stressed Indonesia’s strong fundamentals and fiscal stance, despite geopolitical and energy price risks. Sector gains were led by transport, basic materials, and property, partly offset by weakness in cyclicals and industrials. Notable movers included Surya Citra Media (6.2%), Barito Pacific (3.5%), Adaro Andalan Indonesia (3.0%), and United Tractor (1.5%).

Indonesia’s IDX Composite rose 46 points, or 0.6%, to 7,670 on Thursday morning, rebounding from the prior session’s weakness as U.S. futures strengthened after Wall Street’s overnight rally. Sentiment improved on news that White House-led talks with Iran were “ongoing and productive”. Meanwhile, China’s solid Q1 GDP figures reassured investors that Beijing has so far absorbed the Iran war shock with limited disruption due to ample oil reserves and mitigation efforts. Bank Indonesia also bolstered confidence, with Governor Perry Warjiyo emphasizing policy stability during investor meetings in New York and Boston. Separately, the government highlighted endorsements of Indonesia’s resilience from the Asian Development Bank and FTSE Russell. All major sectors were in the green, led by healthcare, transport, and cyclicals. Notable gainers included Aneka Tambang (2.0%), Telkom Indonesia (1.8%), Indofood Sukses Makmur (1.5%), and Indah Kiat (1.0%).

Indonesian equities rose 61 points, or 0.8%, to 7,735 in Wednesday morning trade, extending gains for a sixth straight session as Wall Street's S&P 500 closed near record highs overnight on easing U.S. inflation pressures and hopes of a Middle East diplomatic breakthrough. Sentiment was also lifted by optimism that Jakarta will maintain its focus on energy security, fiscal revenue mobilization, and spending prioritization amid global uncertainties. Local markets held at five-week highs, with all sectors gaining, led by industrials, transport, and basic materials. However, rupiah depreciation added to cost pressures even as March inflation eased from February’s three-year peak. Meantime, Bank Indonesia will hold a policy meeting next week, with officials signaling limited scope for further easing after 150bp of cuts since September 2024. Early standouts included Impack Pratama Industri (5.5%), Adaro Andalan (4.6%), Trimegah Bangun Persada (3.6%), and Sinar Mas Multiarha (3.3%).