Jakarta. Indonesian stocks fell 0.43% to 6,121 on Tuesday as uncertainty over US-Iran negotiations pushed Brent crude above $107 per barrel, stoking concerns about energy-driven inflation and the prospect of central banks keeping interest rates higher for longer. Rising global bond yields and losses on Wall Street also weighed on investor sentiment.

Jakarta Composite Index ranged between 6,013 and 6,150 during the session. Trading volume reached 38.33 billion shares, with turnover of Rp 13.24 trillion ($736.68 million) and more than 1.8 million transactions. A total of 303 stocks advanced, 373 declined and 118 were unchanged.

Pilarmas Investindo Sekuritas said pressure on Indonesian stocks came from both external and domestic factors. Across Asia, equity markets mostly declined amid uncertainty over negotiations between the United States and Iran.

“Uncertainty is keeping oil prices elevated and raising concerns that energy-driven inflation could prompt central banks to maintain tight monetary policies for longer,” Pilarmas wrote in its research note on Tuesday.

Brent crude rose above $107 per barrel as uncertainty over US-Iran negotiations continued to overshadow markets, despite the resumption of oil flows through Saudi Arabia's East-West pipeline. Iranian officials reportedly doubted that a deal could be reached before the US midterm elections in November, following President Donald Trump's rejection of Tehran's latest proposal.

Pilarmas said rising oil prices were a concern for markets because they could intensify inflationary pressures. Global bond yields also rose amid expectations that central banks would need to maintain or tighten monetary policy to contain energy-driven inflation.

“This has made investors more cautious about accumulating risky assets. Rising bond yields have also increased the appeal of interest-bearing assets relative to stocks,” Pilarmas added.

Domestically, Bank Indonesia projected Indonesia's economic growth to accelerate to 5.2%–6% in 2027, up from its 2026 forecast of 4.9%–5.7%, with investment expected to be a key driver.

BI Governor Destry Damayanti said investment, particularly government investment, needed to be strengthened to support growth, as much of the country's current investment remained tied to government-related projects. BI projected gross fixed capital formation, or investment, to grow by 6.3%–7.1% in 2027. An increase in private investment, including funding from state investment agency Danantara, is also expected to bolster domestic economic activity.

Pilarmas said the projections reflected BI's expectation that investment would be one of the main drivers of growth in 2027, although reliance on government-related projects remained a challenge.

While stronger government investment could sustain economic momentum, more private-sector investment would be needed to support growth over the longer term. Danantara could help catalyze this process by financing strategic projects and encouraging private investors to participate.

Higher investment could also stimulate capital spending, infrastructure development, demand for capital goods, and activity in the industrial and construction sectors. Meanwhile, projected export growth of 5.9%–6.7% in 2027 could provide additional support.

“Overall, the growth target of up to 6% in 2027 shows that BI sees considerable room for economic acceleration. However, achieving it will depend on the effectiveness of government spending, the ability to attract private investment and the implementation of strategic projects. If private investment does not strengthen, growth risks remaining dependent on government stimulus,” Pilarmas said.

Across Asia, stocks mostly declined on Tuesday following losses on Wall Street, while US Treasury yields paused their climb after reaching their highest levels in roughly two decades.

Japan's Nikkei 225 fell 0.6%, South Korea's benchmark declined 0.3% and Hong Kong's Hang Seng Index dropped 0.4%. In mainland China, the Shanghai Composite Index edged up 0.2%.

Overnight, the S&P 500 fell 0.8% on Monday, while the Dow Jones Industrial Average lost 0.7% and the Nasdaq Composite declined 0.9%.

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