Jakarta. Jakarta Composite Index (JCI) reversed early gains to close lower on Tuesday, falling 18 points, or 0.26%, to 6,971 as Middle East tensions and rupiah weakness clouded market sentiment.

The benchmark index traded in a volatile range of 6,942 to 7,022 throughout the session, pressured by persistent uncertainty over rising tensions in the Middle East and currency depreciation.

Market activity remained relatively active, with volume reaching 27.16 billion shares and turnover at Rp 13.46 trillion ($789.4 million), across more than 1.7 million transactions. Decliners outnumbered gainers, with 407 stocks falling, 250 advancing, and 158 unchanged.

Top gainers were led by Putra Mandiri Jembar (PMJS), which surged 34.82%, followed by Ace Oldfields (KUAS) gaining 29.41%, Sinergi Inti Plastindo (ESIP) rising 26.19%, and Ifishdeco (IFSH) climbing 25%.

On the losing side, Chemstar Indonesia (CHEM) dropped 15%, Resource Alam Indonesia (KKGI) fell 11.05%, Nusantara Sawit Sejahtera (NSSS) declined 10.20%, and Tirta Mahakam Resources (TIRT) lost 10%.

Pilarmas Investindo Sekuritas attributed the market’s weakness to escalating geopolitical tensions, particularly between the United States and Iran.

“Markets had previously hoped for ceasefire negotiations. However, rising tensions and threats from US President Donald Trump regarding potential strikes on Iran’s infrastructure have triggered investor concerns,” Pilarmas wrote in a research note on Tuesday.

The tensions have also raised concerns over global energy supply. Oil prices moved higher amid potential disruptions, particularly if the Strait of Hormuz is affected, adding pressure to global equities, including Indonesia.

At the same time, markets are monitoring ongoing diplomatic efforts. The US and Iran, along with international mediators, are reportedly discussing a 45-day ceasefire as part of a two-phase path toward a permanent peace deal.

“However, differences over timelines and demands for a full cessation of hostilities mean the prospects for an agreement remain uncertain,” Pilarmas added.

Domestically, Pilarmas said pressure on the JCI was compounded by rupiah weakness, which briefly touched Rp 17,000 per US dollar, reflecting heightened global risk and raising concerns over Indonesia’s fiscal outlook.

“Geopolitical uncertainty could weigh on the fiscal position, especially if energy prices continue to rise, potentially widening the state budget deficit,” the firm said.

Indonesia recorded state revenue of Rp 574.9 trillion in the January–March period, equivalent to 18.2% of the full-year target of Rp 3,153.6 trillion ($185.1 billion). Government spending reached Rp 815 trillion, or 21.2% of the Rp 3,842.7 trillion budget.

Finance Minister Purbaya Yudhi Sadewa said the widening deficit reflects a deliberate front-loaded fiscal strategy.

“When there is a deficit, the public should not be surprised. Our budget is designed to run a deficit,” he said during a hearing with House Commission XI at the parliament complex in Jakarta. He added that spending has been distributed more evenly throughout the year, with a larger portion disbursed earlier to accelerate economic impact.

Economist Wijayanto Samirin offered a more critical view, saying the government’s planned efficiency measures, including potential cuts to civil servant spending ,  do not address structural issues.

He argued that budget savings would not be meaningful as long as large spending programs continue without evaluation, highlighting the Free Nutritious Meals Program (MBG), the Merah Putih Village Cooperatives (KDMP), and defense procurement (Alutsista) as key areas of concern.

Across Asia, markets mostly edged higher in cautious trading as oil prices continued to rise ahead of a deadline set by US President Donald Trump for Iran to reopen the Strait of Hormuz or face potential attacks on key infrastructure.

Japan’s Nikkei 225 rose marginally by less than 0.1% to 53,429, while South Korea’s Kospi gained 0.8% to 5,494. China’s Shanghai Composite added 0.3% to 3,890, while markets in Hong Kong were closed for a holiday.

On Wall Street, stocks closed higher, with the S&P 500 rising 0.4% after its first weekly gain in six weeks. The Dow Jones Industrial Average added 165 points, or 0.4%, while the Nasdaq Composite climbed 0.5%.

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