Indonesian Equities Poised for Solid Weekly Gains

Indonesian stocks rose 26 points or 0.4% to 6,527 in Friday’s morning trade, extending gains to a three-month high after Thursday’s advance. Sentiment was lifted by stronger U.S. equity futures despite Wall Street’s overnight losses on rebounding Treasury yields and surging oil prices. Locally, July credit growth remained firm though businesses slowed borrowing amid uncertainty. Upside was capped by caution ahead of Q2 current account data due later today, after Q1’s deficit widened to its largest since 2019 on weak trade. Risks also linger from potential El Niño-driven food inflation, threatening purchasing power and confidence. Gains were broad-based, led by financials, infrastructure, and property, with Bank Rakyat Indonesia (2.2%), Sumber Alfaria Trijaya (1.8%), Indosat (1.5%), and Bank Mandiri (1.2%) among key movers. For the week, the market is on track for solid gains of about 1.9%, rebounding from last week’s modest decline.

Indonesian shares surged 69 points, or 1.1%, to 6,465 in early Thursday trade, rebounding from the prior session’s weakness with broad gains across major sectors. Sentiment was lifted after Bank Indonesia held its benchmark rate steady at 5.75% for a second month on Wednesday, in line with estimates, following cumulative hikes of 100bps since May. In main trading partner China, lending benchmarks were also left unchanged for a 15th straight month, with one- and five-year LPRs kept at record lows to support growth. However, caution lingered ahead of Q2 current account data due later this week, after Q1’s deficit widened to its largest since 2019 on weaker trade. Meanwhile, FTSE Russell said it will delay additions, upgrades, and weight increases for Indonesian stocks until at least its December review as it evaluates market reforms. Early standouts included Hartadinata Abadi (8.3%), Amman Mineral International (7.2%), Vale Indonesia (3.4%), and Aneka Tambang (3.3%).

Indonesian shares slipped 39 points or 0.6% to 6,410 in early Wednesday trade, reversing gains from the prior two sessions as Wall Street’s overnight selloff in semiconductors, elevated bond yields, and rising oil prices weighed on sentiment. Domestic caution deepened amid recent natural disasters, doubts over 2027 budget assumptions, and delays in electric motorcycle incentives. Market focus vigilantly turned to Bank Indonesia’s policy decision later today, its first under Acting Governor Destry Damayanti, with interest rates expected to stay unchanged after a cumulative 100 bps of hikes since May. However, traders remain increasingly watchful of how she balances currency stability against President Prabowo Subianto’s growth agenda. Sectoral losses were broad, led by energy, cyclicals, and basic materials, though property gains helped limit declines. Notable laggards included MNC Tourism (-2.9%), Bank Jago (-2.6%), Pertamina Geothermal Energy (-2.3%), and Alamtri Minerals (-2.1%).