Jakarta. Indonesian stocks climbed to a three-month high on Tuesday as investors welcomed the government's 2027 draft state budget and its economic outlook, although the benchmark index gave up some of its gains by the close.

Jakarta Composite Index (JCI) briefly touched 6,490 before ending at 6,449, up 48 points, or 0.75%. The index traded between 6,448 and 6,490 throughout the session.

Trading volume reached 33.65 billion shares with a turnover of Rp 14.83 trillion ($830.21 million) across more than 2.18 million transactions. A total of 399 stocks advanced, 236 declined, and 159 were unchanged.

Pilarmas Investindo Sekuritas said domestic sentiment was a key driver of the rally, with investors responding positively to the 2027 draft state budget, which it said reflected the government's optimism about maintaining macroeconomic stability amid global uncertainty.

"The market expects the government to maintain fiscal discipline as it seeks to achieve its 6% economic growth target in 2027," Pilarmas said in a research note on Tuesday.

The JCI's gains contrasted with weakness across most Asian markets, where investors were weighing renewed concerns over tensions in the Middle East and signs of slowing economic momentum in China.

Pilarmas said a 60-day ceasefire agreement between the United States and Iran had expired without an extension, while US President Donald Trump said he was not interested in prolonging the deal.

The development raised concerns that the conflict could intensify again and potentially disrupt oil supplies through the Strait of Hormuz, pushing oil prices higher.

"A sustained increase in oil prices could add to inflationary pressures and prompt markets to refocus on the direction of the Federal Reserve's interest rate policy," Pilarmas said.

Investors were also digesting weaker economic data from China. Annual retail sales growth slowed to 0.6% from 1%, while cumulative growth in the January-July period eased to 1.2% from 1.3%.

Industrial production growth also slowed to 4.5% from 5.3%. On a cumulative basis, industrial output grew 5.3%, slightly lower than the previous 5.4%.

"This marks the first slowdown in three months," Pilarmas said.

Across the region, Japan's benchmark Nikkei 225 sank 2.5%, while South Korea's Kospi fell 1.6%. Hong Kong's Hang Seng gained 0.2%, and the Shanghai Composite rose 0.2% to 3,990.

On Wall Street, the S&P 500 fell 0.5% but remained near its record high set on Thursday. The Dow Jones Industrial Average dropped 272 points, or 0.5%, while the Nasdaq Composite slipped 0.3%.

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