Indonesia Stocks Retreat Further as Week Opens

Indonesian equities slipped 47 points, or 0.7%, to 6,392 in early Monday trade, extending previous losses as weakness in energy, infrastructure, and financials weighed on sentiment. Caution grew ahead of Bank Indonesia’s policy meeting later this week amid renewed rupiah pressure and signs of foreign outflows. Inflation risks also mounted on elevated oil prices and potential El Niño effects. Still, declines eased after the Finance Minister pledged refunds to taxpayers and businesses that overpaid, in line with regulations, while vowing to safeguard fiscal credibility and keep the deficit below 3% of GDP despite speculation of potential changes to the limit. In its main trading partner, China, the central bank held key lending rates steady for a 16th month ahead of a bilateral summit between President Xi Jinping and U.S. President Donald Trump on September 24. Notable laggards included Adaro Andalan (-3.3%), XLSmart Telecom (-2.0%), Indosat (-1.7%), and Telkom Indonesia (-1.6%).

Indonesia’s IDX Composite added 27 points or 0.4% to 6,488 in Friday morning trade, extending prior gains after Wall Street’s overnight rally as oil prices eased and Treasury yields slipped in the wake of the Fed’s rate hike shock. Domestically, Finance Minister Suahasil Nazara vowed to uphold a credible budget, with economists noting his fiscal expertise and long tenure at the ministry. Strength in energy, tech, and basic materials underpinned the advance, though losses in financials and infrastructure capped momentum. Notable movers included Mitra Adiperkasa (3.4%), Medco Energi (1.6%), Hartadinata Abadi (1.4%), and Vale Indonesia (1.1%). However, the market remains on track for a second consecutive weekly decline, down about 0.8% so far, pressured by growing inflation concerns tied to higher oil prices and looming El Niño risks. Caution also lingered ahead of Bank Indonesia’s policy meeting next week, with renewed rupiah weakness and signs of foreign outflows weighing on sentiment.

Indonesian shares advanced 34 points, or 0.5%, to 6,472 in Thursday morning trade, snapping a six-session slide as U.S. futures rallied after Wall Street’s overnight dip following the Federal Reserve’s first rate hike in three years. Sentiment improved after new Finance Minister Suahasil Nazara pledged to uphold a credible budget, with economists highlighting his fiscal expertise and long tenure at the ministry. Mixed August economic data from main trading partner China added hopes of fresh stimulus from Beijing. However, gains were constrained by growing inflation worries from higher oil and looming El Niño risks. Caution also grew ahead of Bank Indonesia’s policy meeting next week amid renewed rupiah pressure and signs of foreign outflows. Still, all major sectors advanced, led by energy, transport, and cyclicals. Early standouts included Merdeka Battery Materials (3.0%), Indika Energy (2.6%), Indosat Tbk. (1.7%), and Bank Mandiri (1.2%).