Jakarta. Indonesian stocks ended Thursday firmly in the green, with the JCI climbing 1.81% to 6,521 as markets weighed domestic political developments, the Bank Indonesia governor selection, and the upcoming MSCI rebalancing.

The benchmark index moved between 6,376 and 6,521 during the session. Trading volume reached more than 34.4 billion shares, with turnover totaling Rp 13.18 trillion ($742.34 million) across more than 1.9 million transactions. A total of 553 stocks gained, while 96 declined and 138 were unchanged.

Mirae Asset Sekuritas Indonesia Senior Analyst M. Nafan Aji Gusta said concerns over domestic sociopolitical developments surrounding the demonstrations had prompted institutional and foreign investors to temporarily limit their market exposure.

“As long as the demonstrations remain orderly and do not escalate into significant security disruptions, the impact on the JCI is likely to be temporary and sentiment-driven rather than a change in market fundamentals,” Nafan said in a research note on Thursday.

However, he warned that selling pressure could persist if the protests escalated and added to political uncertainty, pushing up the market’s risk premium.

The rally also came as investors awaited the House of Representatives' announcement on the results of its fit-and-proper test for the Bank Indonesia governor candidate later on Thursday.

Pilarmas Investindo Sekuritas said clarity over the next central bank chief could give investors a better picture of monetary policy continuity, risk mitigation, exchange-rate stability, and the effectiveness of macroprudential policies.

“Such certainty is seen as supporting pro-stability sentiment while reducing policy uncertainty in financial markets,” Pilarmas said.

Despite Thursday’s gains, Indonesian stocks are expected to remain volatile ahead of the August 2026 MSCI index rebalancing, which will take effect at the close of trading on Aug. 31. Technical pressure could intensify as the effective date approaches, with the JCI potentially testing support levels between 6,377 and 6,255.

Financial Educator Manager Hendry Wijaya said the JCI had generally been consolidating with a weakening bias this week. The index had previously slipped 0.37% to 6,501 and returned to around the 6,420 range near the end of Wednesday's second session.

According to Hendry, the pressure ahead of the MSCI rebalancing was not entirely unexpected, as the market had already priced in part of the impact from the index provider’s decision.

“Most of the rebalancing effect has already been priced in. The August review was announced on Aug. 13, and there were no negative surprises,” Hendry said on Wednesday.

Beyond domestic developments, regional markets were also tracking geopolitical risks in the Middle East, which continued to influence oil prices.

Iran and Oman reached an agreement on the allocation of their respective shares of the Strait of Hormuz waters, contributing to a decline in oil prices amid signs of diplomatic progress and easing near-term inflation concerns.

However, Iran warned that the agreement alone would not be enough to reopen the vital shipping route. Tehran also said the deal would be meaningless if the United States did not accept the conditions laid out in the proposal.

“This has once again created uncertainty over when energy flows through the route can return to normal,” Pilarmas said in its Thursday research note.

Investors are also awaiting Federal Reserve Chair Kevin Warsh’s speech at the annual Jackson Hole symposium this weekend. While Warsh is not expected to offer a clear signal on the Fed’s September policy decision, his remarks could provide further clues about the direction of US monetary policy.

Asian markets closed mixed on Thursday following modest losses on Wall Street, while oil prices declined. Japan’s Nikkei slipped 0.2%, while South Korea’s Kospi gained 1.5%. Hong Kong’s Hang Seng fell 0.3%, while the Shanghai Composite rose 1.1%.

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