Jakarta. Jakarta Composite Index (JCI) plunged 4.20% or 245 points to close at 5,594 on Friday, its lowest level this year, as investors grappled with escalating geopolitical uncertainty, a weakening rupiah, and persistent concerns over foreign capital outflows.

Trading volume reached 37.7 billion shares with a turnover of Rp 31.7 trillion ($1.75 billion) across more than 2.1 million transactions. Losers dominated the market, with 626 stocks declining, compared with 108 gainers and 81 unchanged issues.

Pilarmas Investindo Sekuritas said the benchmark index remained under pressure heading into the weekend as both external and domestic factors weighed on investor sentiment.

Externally, Asian markets broadly weakened amid growing uncertainty surrounding a fragile US-Iran ceasefire. Investors were confronted with conflicting signals after reports suggested peace negotiations had stalled, despite US President Donald Trump's assertion that talks were ongoing and nearing completion.

"The situation has prolonged uncertainty in the Middle East," Pilarmas said in a research note.

Trump previously indicated that peace negotiations were approaching the final stage and reportedly showed little interest in returning to a full-scale conflict with Iran despite recent hostilities. However, Iranian Foreign Minister Abbas Araghchi said no meaningful progress had been achieved in the talks.

Pilarmas also highlighted that Iran-backed Hezbollah had rejected a US-mediated ceasefire proposal between Israel and Lebanon, further adding to geopolitical concerns in the region.

Market participants are now awaiting the US May employment report for further clues on the strength of the labor market and the future direction of Federal Reserve policy.

Recent labor market data have pointed to continued economic resilience, reinforcing expectations that the Fed could raise interest rates again before year-end as policymakers confront energy-driven inflation risks linked to tensions in the Middle East.

Domestically, Pilarmas said pressure on the JCI was compounded by the rupiah's continued depreciation and lingering concerns over sustained capital outflows. 

Government data showed Indonesia booked Rp 60.9 trillion in net foreign inflows in the second quarter through June 3, supported by Rp 14.4 trillion in government bond inflows and Rp 70.1 trillion in SRBI purchases, partly offset by Rp 23.5 trillion in equity outflows.

Investor anxiety has also been fueled by speculation over a potential review or reclassification of Indonesia's capital market status by MSCI.

Earlier, Indonesia Stock Exchange (IDX) Development Director Jeffrey Hendrik expressed confidence that Indonesia would retain its emerging market status in this year's MSCI assessment.

Asian equities broadly retreated on Friday, led by sharp declines in technology and artificial intelligence-related stocks following a selloff in the US semiconductor sector.

On Wall Street, chipmaker Broadcom tumbled 12.6% overnight after issuing a forecast that fell short of investor expectations, raising concerns about valuations across the broader AI and technology sectors.

Despite the selloff in tech stocks, the S&P 500 rose 0.4% and the Dow Jones Industrial Average gained 1.7% to a record high, while the Nasdaq Composite slipped 0.1%.

In Asia, investors dumped major AI-linked shares, sending South Korea's SK Hynix down 8.6% and Samsung Electronics lower by 5.4%.

The Kospi index dropped 5.1% to 8,199.44, while Japan's Nikkei 225 fell 1.3% to 66,573 as technology stocks led losses despite data showing real wages rose for a fourth consecutive month.

Hong Kong's Hang Seng Index declined 1.2% to 24,948, while China's Shanghai Composite Index slipped 0.3% to 4,045.

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