Jakarta. Indonesian stocks rose nearly 1% on Monday as renewed foreign buying and expectations of another Bank Indonesia interest rate hike outweighed concerns over escalating tensions in the Middle East.

Jakarta Composite Index (JCI) closed up 56 points, or 0.91%, at 6,231 after trading between 6,191 and 6,249.

Trading volume reached 35.2 billion shares with a turnover of Rp 16.2 trillion ($903 million) across more than 2.38 million transactions. Gainers outnumbered losers 399 to 210, while 185 stocks were unchanged.

Pilarmas Investindo Sekuritas said sentiment toward Indonesian equities remained relatively positive, supported by the return of foreign investors. Foreign investors recorded a net buy of Rp 725.11 billion in the regular market at the end of last week.

"Although still limited, the buying indicates foreign investors are beginning to take advantage of Indonesia's attractive stock valuations through bargain-hunting," Pilarmas said in a research note.

The brokerage also pointed to Bank Indonesia's latest Business Activity Survey, which showed the second-quarter 2026 Prompt Manufacturing Index (PMI) at 51.43, indicating the manufacturing sector remained in expansion territory.

Separately, Trimegah Sekuritas Indonesia Chief Economist Fakhrul Fulvian said Bank Indonesia should raise its benchmark interest rate by another 25 basis points (bps) at its July 21-22 policy meeting, arguing that Indonesia still needs stronger foreign capital inflows despite improving market sentiment.

"Bank Indonesia should continue with another 25 bps rate hike at the July meeting. The case is not based solely on current market conditions, but also on the central bank's previously communicated pre-emptive policy approach. Credibility is built when policy actions follow through on that communication," Fakhrul said.

He said the recent gains in the JCI and the rupiah reflected improving investor confidence, but added that "Indonesia still needs substantial foreign capital inflows this year. That positive momentum must be reinforced through consistent and credible policies. "Across the region, Asian markets traded mixed as investors continued to assess the inflationary risks stemming from the escalating conflict between the United States and Iran.

Japan's markets were closed for a public holiday. South Korea's Kospi tumbled 4.5% to 6,516 as investors sold AI-related stocks. Samsung Electronics fell 4.7%, while memory chipmaker SK Hynix dropped 4.5%.

Taiwan's Taiex slipped 0.5%. Taiwan Semiconductor Manufacturing Co. (TSMC) rose 1.3% after plunging 7.3% on Friday following its announcement of an additional $100 billion investment to expand chip production capacity in the United States.

Hong Kong's Hang Seng gained 1.7% to 24,984, while China's Shanghai Composite Index edged down 0.1% to 3,761.

Pilarmas said the US-Iran conflict had expanded to attacks on critical infrastructure, disrupting shipments through the Strait of Hormuz and driving oil prices higher.

"The conflict between the US and Iran has expanded to target critical infrastructure. Disruptions to shipping through the Strait of Hormuz have pushed oil prices higher, intensifying concerns over global inflation," the brokerage said.

Brent crude, the global benchmark, rose 3.2% to $90.95 per barrel, while US West Texas Intermediate crude gained 2.8% to $84.04 per barrel.

Pilarmas said higher energy prices could prompt central banks to keep monetary policy tight or tighten further to contain inflation, adding another source of uncertainty for global financial markets.

On Wall Street, stocks ended last week lower. The benchmark S&P 500 fell 1%, while the Dow Jones Industrial Average lost 0.8%. The technology-heavy Nasdaq Composite declined 1.4%.

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