Jakarta. Indonesian stocks closed sharply higher on Tuesday, with the Jakarta Composite Index (JCI) climbing 85 points, or 1.37%, to 6,319, tracking gains across Asian markets as investors welcomed strong US manufacturing data while remaining optimistic about Indonesia's stable inflation and improving external position.

The benchmark index traded between 6,238 and 6,319. Total trading volume reached 33.4 billion shares, with turnover of Rp 12.9 trillion ($715.59 million) across more than 2.12 million transactions. Advancers outnumbered decliners 399 to 224, while 170 stocks were unchanged.

Pilarmas Investindo Sekuritas said the JCI's advance mirrored the rally in Asian equities, which followed Wall Street higher after stronger-than-expected US manufacturing data.

The brokerage noted that the US ISM Manufacturing Index rose to 55.6 from 53.3, marking its fastest pace of expansion in more than four years.

"The data reflects stronger demand and production activity, which could help support the US labor market," Pilarmas said in a research note on Tuesday.

Market sentiment also improved after reports that talks between Iran and Oman had made progress toward ensuring smoother shipping through the Strait of Hormuz, easing concerns over disruptions to global energy supplies.

Domestically, Pilarmas said investor confidence was supported by Indonesia's contained inflation, with annual inflation reaching 2.88% in July 2026, remaining within Bank Indonesia's target range of 2.5% ±1%.

The brokerage said the inflation reading reflected the consistency of monetary policy and the government's close coordination with Bank Indonesia in maintaining price stability.

Indonesia's external sector also showed signs of improvement. The country's trade balance posted a deficit of $450 million in June, narrowing significantly from a $1.61 billion deficit in the previous month. On a cumulative basis, the deficit also improved to $450 million from $3.58 billion previously, boosting optimism over the resilience of Indonesia's external sector.

"The market is also awaiting Indonesia's second-quarter 2026 GDP data, which is scheduled to be released on Wednesday," Pilarmas wrote.

Ahead of the release, the Institute for Economic and Social Research (LPEM) at the University of Indonesia's Faculty of Economics and Business expects Southeast Asia's largest economy to expand around 5% this year, with growth projected in a range of 4.95% to 5.05%.

The forecast is broadly in line with projections from several international institutions, although it falls short of the government's more ambitious target. The government has set a 5.4% growth target in the 2026 state budget, while Bank Indonesia expects the economy to expand between 4.9% and 5.7%.

The International Monetary Fund and the World Bank both project Indonesia's economy to grow 5% this year, while S&P Global Ratings expects slightly stronger growth of 5.1%.

Across Asia, Japan's Nikkei 225 rose 0.3%, South Korea's Kospi advanced 1.6%, and China's Shanghai Composite gained 0.3%, while Hong Kong's Hang Seng slipped 0.6%.

Overnight on Wall Street, the S&P 500 climbed 1.5% to 7,600.50, the Nasdaq Composite surged 2.1% to 25,913.90, and the Dow Jones Industrial Average gained 1.3% to 53,178.41, marking its highest close since July 6.

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