Jakarta. Indonesia’s benchmark stock index opened higher Tuesday as investors assessed the impact of President Prabowo Subianto’s decision to replace Finance Minister Purbaya Yudhi Sadewa with Suahasil Nazara.

The index rose 10 points, or 0.15%, to 6,544 at the open, after trading between 6,478 and 6,549. Trading volume reached 2.83 billion shares, with turnover of Rp 1.6 trillion ($90.56 million) across more than 181,000 transactions. A total of 196 stocks advanced, 294 declined and 203 were unchanged.

Phintraco Sekuritas said investors were still monitoring technical pressure in the stock market while awaiting the direction of fiscal policy following Suahasil’s appointment as finance minister.

President Prabowo appointed Suahasil on Monday, replacing Purbaya. Suahasil previously served as deputy finance minister under former President Joko Widodo.

His experience is expected to support a smooth fiscal policy transition, as he is considered familiar with the government’s budget structure.

Phintraco Sekuritas said the leadership change is expected to strengthen fiscal credibility and discipline, including maintaining the state budget deficit below the 3% of gross domestic product (GDP) threshold.

“Investors expect the change in finance minister to restore fiscal credibility and consistency, allowing domestic and global investor confidence in Indonesia’s macroeconomy and financial markets to recover,” Phintraco Sekuritas said.

A recovery in investor confidence could encourage capital inflows, which could support the rupiah, lower government bond yields and help stabilize the stock index, the brokerage added.

Pluang Research said the simultaneous rally in four major Indonesian bank stocks -- Bank Rakyat Indonesia (BBRI), Bank Negara Indonesia (BBNI), Bank Central Asia (BBCA) and Bank Mandiri (BMRI) -- following Suahasil’s appointment underscored the banking sector’s role as one of the most sensitive barometers of Indonesia’s macroeconomic sentiment.

“When the market is confident that policy continuity is maintained, these banks are the first to reflect that optimism because their businesses are directly linked to rupiah stability, government bond yields and state liquidity placements at state-owned banks,” Pluang said in a report Tuesday.

Suahasil’s track record as a long-serving Finance Ministry technocrat gives the market confidence that fiscal deficit discipline will remain below 3%, rather than shifting toward more expansionary policies.

However, Pluang warned that risks could emerge if fiscal policy becomes more expansionary or government intervention in state-owned banks increases. Such developments could put renewed pressure on bond yields and the rupiah while creating new uncertainty over banking-sector liquidity, which has been a key strength for the bank stocks.

Phintraco Sekuritas nevertheless expects the impact of the finance minister change on the stock market to remain volatile in the short term. Investors will wait for the implementation of Suahasil’s fiscal policies before assessing their longer-term impact.

Globally, Kiwoom Sekuritas Indonesia said market sentiment was pressured by growing concerns over valuations and the sustainability of the artificial intelligence investment cycle.

Anthropic CEO Dario Amodei has called for slower AI development over concerns about the risk of technology misuse, while several industry figures have supported the view. Meanwhile, US President Donald Trump has argued that the United States must maintain its AI edge over China, leaving investors focused on differing views over the future direction of technology development.

Wall Street closed lower Monday. The Nasdaq Composite fell 0.56%, the S&P 500 weakened 0.48% and the Dow Jones Industrial Average declined 0.29%.

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