Jakarta. Indonesian stocks rose 1.1% on Friday, outperforming most Asian markets as investors took comfort in Bank Indonesia's assessment that the country's external debt remains healthy, offsetting pressure from escalating geopolitical tensions in the Middle East.

Jakarta Composite Index (JCI) climbed 67 points, or 1.1%, to close at 6,175, after trading between 6,079 and 6,192.

Trading volume exceeded 28.5 billion shares, with turnover reaching Rp 14.8 trillion ($825 million) across more than 2 million transactions. Advancers outnumbered decliners, with 349 stocks rising, 261 falling, and 187 unchanged.

Pilarmas Investindo Sekuritas said domestic sentiment was supported by the latest Bank Indonesia data showing Indonesia's external debt stood at $462.4 billion in May, up 2.1% year-on-year, slowing from 3.2% growth in April.

Bank Indonesia said the country's external debt structure remained sound, with the debt-to-GDP ratio at 30.6% and 84.6% of borrowings consisting of long-term debt, helping keep refinancing risks manageable. The central bank also pledged to continue coordinating with the government to ensure external borrowing remains productive and sustainable amid global economic uncertainty.

Pilarmas said the figures indicated the government continued to rely on external financing to support the state budget and development while keeping debt growth under control.

"Indonesia's external debt continues to grow at a measured pace, while its structure remains healthy as it is dominated by long-term borrowings and the debt-to-GDP ratio remains relatively low, keeping refinancing risks manageable," Pilarmas said in a research note.

The brokerage cautioned that a weaker rupiah and elevated global interest rates could increase debt servicing costs in the future. However, it said the current pace of external debt growth is unlikely to pose a significant risk to Indonesia's economic stability as long as the funds are channeled into productive sectors and fiscal discipline is maintained.

Most Asian markets, meanwhile, closed lower as investor sentiment remained weighed down by escalating tensions between the United States and Iran.

According to Pilarmas, the latest escalation followed renewed US military strikes on Iran after earlier attacks targeting tankers bound for Iranian ports following the reimposition of a blockade.

Iran later retaliated by attacking US military bases in the Middle East. Tehran was also reported to have instructed Yemen's Houthi group to prepare to block oil export routes through the Red Sea should Washington target Iran's energy infrastructure.

Pilarmas said the developments heightened concerns over potential disruptions to global oil supplies, keeping crude prices elevated and raising fears that inflationary pressures could reemerge and complicate the outlook for global monetary policy.

Regional markets also remained under pressure from continued selling in semiconductor and artificial intelligence-related stocks.

Japan's Nikkei 225 fell 4%, while Taiwan's market dropped 6.5%, led by a 7.3% decline in TSMC after the world's largest contract chipmaker announced plans to invest an additional $100 billion in fabrication plants in the United States.

Hong Kong's Hang Seng Index lost 1.78%, while China's Shanghai Composite Index fell 3.05%. South Korean markets were closed.

AI-related stocks have faced sustained selling in recent weeks amid concerns that their valuations have become overstretched and that demand for AI-related hardware may prove unsustainable if the technology fails to deliver the expected gains in profits and productivity.

On Wall Street overnight, the S&P 500 slipped 0.5%, despite nearly three-quarters of its constituent companies posting gains following stronger-than-expected quarterly earnings. The Dow Jones Industrial Average edged down 0.2%, while the Nasdaq Composite dropped 1.5%.

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