Jakarta. Indonesian stocks opened higher on Thursday, with investors weighing lingering concerns over Bank Indonesia's independence and fiscal risks at home against the Federal Reserve's latest policy decision and mixed global market sentiment.

Jakarta Composite Index (JCI) gained 34 points, or 0.57%, to 6,125 in early trade, moving within a range of 6,106 to 6,128.

Around 1.6 billion shares had changed hands in the opening minutes, with total turnover reaching Rp 631.9 billion ($35 million) across 91,230 transactions. Advancers outnumbered decliners by 351 to 131, while 481 stocks were unchanged.

Domestically, Phintraco Sekuritas noted that the Indonesia Stock Exchange (IDX) had completed its major review of the IDXBUMN20 index, which will take effect from Aug. 5, 2026, through Feb. 2, 2027.

The review resulted in no changes to the index constituents, with all 20 state-owned enterprise stocks remaining in the benchmark. However, the exchange adjusted the number of shares used in the index calculation and revised constituent weightings.

The weighting of Bank Rakyat Indonesia (BBRI), Bank Mandiri (BMRI), Bank Negara Indonesia (BBNI), and Telkom Indonesia (TLKM) was reduced after the implementation of the 15% maximum weight cap. Meanwhile, the weightings of Aneka Tambang (ANTM), Perusahaan Gas Negara (PGAS), Dayamitra Telekomunikasi (MTEL), Bank Syariah Indonesia (BRIS), and Bukit Asam (PTBA) were increased.

Phintraco also highlighted ongoing capital market reforms ahead of MSCI's index review in November 2026. The Financial Services Authority (OJK), together with Indonesia's self-regulatory organizations, continues to strengthen communication with global index providers while accelerating market reform initiatives.

Separately, OJK is targeting the issuance of a regulation on the demutualization of the Indonesia Stock Exchange in the second week of September. The regulator is currently drafting implementing rules under Law No. 4/2026 in consultation with relevant stakeholders.

Meanwhile, Kiwoom Sekuritas Indonesia said the Center of Reform on Economics (CORE) Indonesia believes Bank Indonesia's independence could come under greater pressure under provisions of the Financial Sector Development and Strengthening Law (P2SK), which it says allows more room for government intervention in central bank policymaking.

CORE also projects that fiscal conditions could come under pressure in the second half of 2026 due to potentially higher energy subsidies amid elevated oil prices, a tax revenue shortfall of Rp 73 trillion to Rp 149 trillion, and rising government borrowing costs as investors demand higher risk premiums.

"These conditions could potentially push the state budget deficit beyond the government's projection of 2.85% of GDP," Kiwoom said, citing CORE Indonesia.

Overseas, sentiment remained cautious after the Federal Reserve kept its benchmark interest rate unchanged at 3.50%-3.75%, although three Federal Open Market Committee members dissented in favor of a 25-basis-point rate hike.

According to Kiwoom, the split decision reflected growing concerns over inflationary pressures driven by higher oil prices. Investors are now digesting Fed Chair Kevin Warsh's remarks that inflation remains the central bank's primary concern despite relatively softer inflation data in June.

Technology shares also remained under pressure after the sell-off in semiconductor stocks extended on concerns over heavy artificial intelligence infrastructure spending, intensifying competition from China, and SK Hynix's earnings, which disappointed market expectations despite a sharp increase in profit.

Wall Street ended lower overnight. The S&P 500 fell 1.5%, the Nasdaq Composite lost 1.7%, and the Dow Jones Industrial Average dropped 2.2% as investors remained concerned about the inflation outlook and elevated valuations in AI-related stocks despite the Fed's decision to leave interest rates unchanged.

Across Asia as of 9:14 a.m. Jakarta time, Japan's Nikkei 225 rose 2.18%, South Korea's Kospi jumped 5.37%, Hong Kong's Hang Seng slipped 0.08%, while China's Shanghai Composite edged up 0.11%.

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