Indonesian Shares Retreat Ahead of BI Rate Call

Indonesian shares rose 0.4% to 5,302 on Wednesday afternoon, reversing early losses as traders assessed Bank Indonesia’s latest policy decision. The central bank held its key rate at 5.75% for a fourth straight month but raised its deposit facility rate by 25bps to 5% and enhanced incentives for DNDF hedging to attract foreign capital. To boost liquidity, the board cut the reserve requirement ratio by 1ppt to 8% from Nov. 1, with a further easing to 7% from Dec. 1, aiming to inject around IDR 190 trillion into the financial system. Gov. Destry Damayanti said total hikes of 100bps earlier this year had helped anchor inflation expectations despite persistent El Niño-related food price pressures. Meanwhile, U.S. stock futures strengthened as concerns over AI investment eased. Healthcare, property, consumer non-cyclicals, and infrastructure drove gains. AKR Corp. jumped 6.2%, followed by Indofood Sukses Makmur (4.8%) and Indosat Tbk (4.1%). The four major banks rose between 0.3% and 1%.

Indonesian equities fell 84 points, or 1.6%, to 5,197 on Wednesday morning, reversing a prior rally after regulatory measures aimed at regaining investor confidence, including adjustments to stocks with high shareholding concentration and greater disclosure of shareholder affiliations. Traders turned cautious ahead of Bank Indonesia's rate decision later today. While the central bank is expected to hold borrowing costs for a fourth month, room for easing is limited after a cumulative 100bps hike in May and June. Still, the decline was capped by record FDI in Q3 2026, lifted by solid inflows into the base metal industry. In top trading partner China, key lending rates were left unchanged for a 17th month after stronger-than-expected Q3 GDP. Cyclicals, basic materials, and financials were mainly lower, partly offset by strength in infrastructure, non-cyclicals, and transport. Notable decliners included Solusi Energi Digital (-6.9%), Mitra Adiperkasa (-6.0%), and Medco Energi (-3.9%).

Indonesian shares surged 125 points, or 2.5%, to 5,119 in early Tuesday trade, snapping a three-session losing streak as bargain hunters returned after a record $82 billion two-day rout drove the market to a six-year low, triggered by MSCI’s warning that Indonesia could be removed from its global indexes next year. Meanwhile, regulators sought to restore investor confidence by proposing to exclude stocks with highly concentrated ownership from benchmark calculations to improve price discovery. Globally, U.S. equity futures strengthened as Wall Street rebounded overnight, led by technology shares. Gains spread across sectors, with financials, healthcare, basic materials, and energy among the top performers. Meanwhile, main trading partner China kept its benchmark lending rates unchanged for a 17th consecutive month in October, in line with expectations. Among early movers, Telkom Indonesia jumped 13.6%, followed by Charoen Pokphand (8.2%), Bank Mandiri (7.7%), and Aneka Tambang (7.3%).