Jakarta. Indonesian stocks posted weekly gains despite continued foreign selling and weaker trading activity, as investors weighed global geopolitical developments, a hawkish US Federal Reserve, and uncertainty surrounding Indonesia's market classification review by MSCI.

The benchmark Jakarta Composite Index (JCI) rose 2.82% during the June 15-19 trading week, closing at 6,177.14, according to data from the Indonesia Stock Exchange (IDX). The gain marked a recovery from the previous week's close of 6,007.66.

Market capitalization on the exchange also increased 2.51% to Rp 10,788 trillion ($606 billion) from Rp 10,524 trillion a week earlier, reflecting improved investor sentiment despite subdued trading activity.

However, foreign investors remained net sellers. Overseas investors recorded net sales of Rp 3.19 trillion during the week, bringing cumulative foreign outflows in 2026 to Rp 68.25 trillion.

Investor sentiment was influenced by a combination of global and domestic developments. A tentative peace agreement between the United States and Iran helped ease geopolitical tensions and pushed oil prices lower after Washington lifted a maritime blockade on Iran. Nevertheless, uncertainty remained after US Vice President JD Vance said any economic relief for Tehran would depend on its compliance with the agreement.

At the same time, investors remained cautious after the US Federal Reserve signaled that interest rates could stay elevated for longer. According to brokerage firm Pilarmas Investindo Sekuritas, the Fed's hawkish outlook reinforced expectations of additional rate increases later this year despite the central bank's decision to leave rates unchanged.

The brokerage said that nine of the 19 members of the Federal Open Market Committee still expect at least one additional rate increase this year to contain inflationary pressures.

Domestically, market participants focused on MSCI's latest Global Market Accessibility Review, which maintained Indonesia's status as an emerging market while highlighting concerns over market governance and transparency.

Pilarmas said MSCI downgraded Indonesia's assessment for information flow, citing limited transparency in share ownership and concerns about potential coordinated trading practices.

Investors are now awaiting MSCI's Annual Market Classification Review, scheduled for June 24 Indonesia time, for further clarity on whether the country's current review status will be maintained and whether Indonesia will retain its emerging market classification.

Meanwhile, Bank Indonesia unexpectedly raised its benchmark interest rate by 25 basis points to 5.75 percent, stepping up efforts to stabilize the rupiah after the currency weakened to its lowest level in several months.

The Indonesian currency slipped 7 points to Rp 17,801 per US dollar at the close of trading on Friday, from Rp 17,794 in the previous session.

The central bank also announced tighter foreign exchange rules, lowering the threshold for purchasing US dollars and other foreign currencies without supporting documentation to $10,000 per person per month from $25,000 previously. The new regulation will take effect on July 1.

Governor Perry Warjiyo said the measures are intended to support rupiah stability and strengthen oversight of foreign exchange transactions as external pressures continue to weigh on Indonesia's financial markets.