Jakarta. Indonesian stocks rose 0.18% to 5,397 in early trading on Friday, gaining 9 points despite an initial dip, as Danantara’s entry into the market lifted sentiment even as global uncertainties fueled caution among investors.

“Investors need to watch for potential profit-taking toward the end of the week amid rising global uncertainty,” Phintraco Sekuritas wrote in its research note on Friday.

Data from RTI showed that 3.212 billion shares had changed hands in early trading, with a transaction value of Rp 1.02 trillion ($56.5 million) and 143,271 transactions recorded. A total of 307 stocks rose, 186 fell and 220 remained unchanged.

Phintraco Sekuritas identified 5,300 as the nearest support level needed to maintain positive momentum and guard against potential selling pressure. A break below that level could prompt the market to test the next support range of 5,180 to 5,200, the brokerage said.

Rising oil prices could add to global inflationary pressures and limit the scope for monetary easing, Phintraco Sekuritas said. This could increase the risk of Bank Indonesia and the US Federal Reserve keeping interest rates high for longer or raising them again.

“This could weigh on stock and bond markets while increasing volatility in financial markets,” the brokerage said.

Energy stocks, particularly oil and gas companies, could benefit from higher crude prices, while coal producers could gain from growing concerns over global energy supply security, Phintraco Sekuritas added. However, the impact would depend on commodity prices and the fundamentals of individual companies.

Pluang Research said Danantara’s entry into the stock market marked a long-awaited development following the Jakarta Composite Index’s recent turmoil over concerns surrounding global index provider MSCI.

“The market is no longer seeing just statements of readiness to buy, but actual action. Danantara began buying state-owned stocks on Wednesday and confirmed that it would continue increasing its holdings as long as valuations remained attractive and prospects were favorable. The execution has also been convincing,” Pluang said in its research note on Friday.

Rather than selecting stocks directly, Danantara appointed professional investment managers through a due diligence process, with a clear focus on generating returns, Pluang said.

The market response was immediate. The Jakarta Composite Index rose for three consecutive sessions, gaining nearly 8% and becoming the best-performing index among emerging markets in Asia-Pacific, even as regional markets weakened.

“We believe attractive opportunities lie in state-owned stocks that offer two advantages: consistent buying support from a major investor and high dividend yields. However, the Jakarta Composite Index has only recovered part of last week’s roughly 16% decline, while consultations with MSCI are still underway, meaning volatility is likely far from over. We therefore recommend that investors accumulate shares gradually rather than chase prices,” Pluang said.

Global sentiment deteriorated as investors questioned whether potential returns from artificial intelligence investments would justify the costs, Kiwoom Sekuritas Indonesia said.

“Amid this uncertainty, investors tended to reduce their exposure to high-risk stocks and shift toward more defensive instruments,” Kiwoom said.

Geopolitical tensions also intensified after the Iran-backed Houthi group attacked energy facilities and an airport in Saudi Arabia. The escalation heightened security risks in the Gulf region and raised concerns about disruptions to global energy distribution.

As of 9:53 a.m. Jakarta time, Japan’s Nikkei 225 fell 1.72%, while South Korea’s Kospi dropped 2.21%. Hong Kong’s Hang Seng Index edged up 0.07%, while Shanghai’s SSE Composite Index declined 1.51%.

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