Jakarta. Indonesian stocks fell 1.02% to 6,009 on Thursday as oil prices above $90 per barrel, rising inflation, and uncertainty over global interest rates weighed on investor sentiment, overshadowing improvements in domestic manufacturing and trade.

Jakarta Composite Index (JCI) dropped 61 points, moving between 5,973 and 6,095 during the session. Trading volume reached 32 billion shares, with a transaction value of Rp 10.67 trillion ($594.16 million) and more than 1.5 million transactions. Of the stocks traded, 450 declined, 206 advanced and 134 were unchanged.

Pilarmas Investindo Sekuritas said elevated global oil prices remained a concern because they could increase pressure on the state budget and influence the direction of monetary policy.

Indonesia's annual inflation rate accelerated to 3.28% in September 2026, approaching the upper end of Bank Indonesia's target range of 2.5%, plus or minus 1 percentage point. Indonesia's Central Statistics Agency (BPS) reported that consumer prices rose 0.30% month-to-month in September, bringing cumulative inflation since the beginning of the year to 2.17%.

Pilarmas said the annual inflation rate was a factor investors needed to monitor as it approached the central bank's 3.5% upper target limit.

"These conditions could influence market expectations for Bank Indonesia's interest rate policy, particularly if inflationary pressures from the energy sector persist," Pilarmas said.

Despite the market pressure, several domestic economic indicators showed signs of improvement. Indonesia's manufacturing purchasing managers' index (PMI) rose to 52.4 in September from 49.8 in August, returning to expansion territory and reaching its highest level in seven months. The improvement was driven by increases in output, new orders and exports. The country's trade balance also recorded a $3.55 billion surplus in August, supported by exports of $26.61 billion, which exceeded imports of $23.06 billion.

"The recovery in manufacturing activity and the trade surplus could help cushion the JCI's correction today amid continued volatility in external sentiment," Pilarmas said.

External developments continued to weigh on sentiment, with Asian markets posting mixed movements as investors monitored the conflict in the Middle East. 

Elsewhere in Asia, stocks mostly advanced on Thursday as investors bought technology-related shares despite lingering concerns over the war in Iran. Japan's benchmark Nikkei 225 surged 3.3%, while South Korea's Kospi gained 2.0%. Hong Kong and Shanghai markets remained closed for a national holiday.

Pilarmas said investors were watching crude oil prices, which remained above $90 per barrel, amid signs of recovering oil flows from the region and stalled negotiations between the United States and Iran.

Iranian government spokesperson Fatemeh Mohajerani said Tehran had received a US proposal concerning the reopening of the Strait of Hormuz. However, investors remained cautious about whether oil supplies could recover sustainably without a lasting agreement to end the conflict.

"Persistently high energy prices are also fueling inflation concerns. These conditions could lead to tighter monetary policy for longer," Pilarmas said in its Thursday research note.

The brokerage added that elevated US Treasury yields and uncertainty over the Federal Reserve's interest rate direction ahead of its late-October meeting continued to weigh on markets. Investors were also turning their attention to third-quarter 2026 earnings reports from listed companies.

Investors were also monitoring President Prabowo Subianto's latest cabinet reshuffle, his seventh since taking office. The changes, announced at the Presidential Palace in Jakarta on Thursday, affected several ministerial and deputy ministerial positions, government agencies and the leadership of the Ombudsman.

Energy and Mineral Resources Minister Bahlil Lahadalia was appointed coordinating minister for downstream industries and energy. Arrmanatha Christiawan Nasir was named foreign minister, replacing Sugiono, who moved to the post of coordinating minister for human development and culture.

M. Sarmuji was appointed industry minister, replacing Agus Gumiwang Kartasasmita. Dudung Abdurachman was named coordinating minister for political and security affairs, while Indonesian National Police chief Gen. Listyo Sigit Prabowo was appointed to replace Dudung as presidential chief of staff.

Add as a preferred source on Google +