Indonesian Equities Trade Higher Despite Volcano Disruptions

Indonesian stocks rose 30 points, or 0.4%, to 6,662 in early trading on Monday, rebounding from the prior decline as healthcare, energy, and infrastructure sectors lifted sentiment. Support came from government signals that the Free Nutritious Meals program budget could be trimmed below IDR 200 trillion in 2027, seen as a prudent fiscal step. However, upside was limited by a sharp drop in U.S. futures with Wall Street shut Monday for a holiday. Locally, concerns lingered over natural disasters, including Mount Anak Krakatau’s eruptions over the weekend, which heavily disrupted air travel and affected 170,000 people. Traders also stayed cautious ahead of key domestic releases this week, notably August forex reserves, consumer sentiment, and July retail sales. In main trading partner China, CPI and PPI data will also be due in the coming days, along with trade performance. Notable movers included Adaro Andalan (5.1%), Bukit Asam (4.9%), Kalbe Farma (3.2%), and United Tractor (2.6%).

Indonesia’s IDX Composite edged up 15 points or 0.2% to 6,676 in early Friday trade, holding gains from the prior session and touching its highest level in 3-1/2 months. Sentiment was supported by an overnight Wall Street rally after Fed Governor Waller’s dovish remarks prompted traders to pare back rate-hike bets. Confidence also improved with a smooth leadership transition at Bank Indonesia, as newly inaugurated Governor Destry Damayanti pledged responsive policy to safeguard stability and economic growth. However, upside was tempered by caution ahead of key domestic data due next week, including August forex reserves, consumer sentiment, and July retail sales. Inflation worries also lingered after August figures accelerated amid potential El Niño-related food supply disruptions. Notable movers included Indah Kiat Pulp & Paper (1.7%), Mitra Adiperkasa (1.1%), and Bumi Resources (1.0%). For the week, the market is on track to post solid gains of about 2.7%, reversing prior declines.

Indonesian shares rose 49 points, or 0.7%, to 6,644 on Thursday, rebounding from the prior muted session and touching their highest level in 3-1/2 months. Sentiment improved after a partial rebound on Wall Street overnight, with traders bargain-hunting in sectors hit by recent risk-off selling. Locally, Destry Damayanti was sworn in as governor of Bank Indonesia on Wednesday, becoming the first woman to lead the central bank. In her confirmation hearing, she pledged to keep policy responsive to economic challenges while promoting stability and supporting growth. However, gains were capped by concerns that headline and core inflation could climb further in coming months, driven by higher input and logistics costs, rebounding energy prices, and potential El Niño-related food supply disruptions. All sectors advanced, led by basic materials, non-cyclicals, and energy. Early standouts included Charoen Pokphand (7.6%), Adaro Andalan (4.0%), Bukit Asam (3.7%), and Medco Energi (2.1%).