Jakarta. Indonesian stocks turned lower on Thursday after an early rise, as investors remained cautious ahead of President Prabowo Subianto’s address on the 2027 state budget and financial note, with the Jakarta Composite Index (JCI) moving between 6,336 and 6,390 after opening 0.23% higher at 6,388.

Trading volume reached 1.23 billion shares in the early session, with transactions valued at Rp 596.34 billion and 90,521 trades recorded, according to RTI data. A total of 213 stocks rose, 191 fell, and 242 remained unchanged.

Investors are turning their attention to Prabowo’s state address on Friday, when he is scheduled to present the 2027 state budget bill and financial note, Phintraco Sekuritas said. The speech is expected to provide more details on the government’s fiscal and budget priorities for next year.

“Investors expect budget allocations to be made effectively and efficiently, while reducing spending on populist policies, so that the government can meet the 2027 budget deficit target of around 1.8%-2.4% of GDP,” Phintraco Sekuritas said.

Separately, Kiwoom Sekuritas Indonesia said government debt had reached Rp 10,293.69 trillion, or 41.26% of GDP, as of June 2026. The figure has increased by Rp 1,819.79 trillion, or 21.5%, since the end of September 2024.

Economists noted that government debt has grown 67.5% since 2020, outpacing nominal GDP growth of 64.9%. Meanwhile, interest payments as a share of fiscal revenue increased to 19% from 14.6% in 2022.

Although the debt-to-GDP ratio remains below the 60% legal limit, the trend needs to be monitored to maintain fiscal sustainability, Kiwoom said.

The 2026 state budget deficit has widened to Rp 689.15 trillion, or 2.68% of GDP, while debt financing needs have reached Rp 832.21 trillion.

On the equity front, MSCI made no changes to the composition of emerging-market countries in the MSCI Frontier Emerging Markets Index following its 2026 Annual Country Review.

“This review showed no change to the list of Emerging Markets countries currently included in the index, so there was no composition change stemming from this annual review. MSCI made changes to the composition of the Indonesian stock index,” Kiwoom said.

In the MSCI Global Standard Indexes, no stocks were added, while CPIN and GOTO were removed. In the MSCI Small Cap Indexes, CPIN was added, while ARTO, BUKA, ESSA, FILM, HEAL, KPIG, RATU, SMGR and TCPI were removed.

Global market sentiment remained broadly positive after July US inflation data came in line with expectations. Headline CPI rose 0.1% month-on-month and slowed to 3.4% year-on-year, while core CPI increased 0.2% month-on-month and eased to 2.5% year-on-year.

“The data reduced pressure on the Fed to raise rates, reflected in the probability of the Fed holding rates in September rising to 62% from 54% previously. Nevertheless, the market remains wary of a potential increase in inflation in August due to the surge in oil prices,” Kiwoom said.

Wall Street closed higher on Wednesday, supported by the July US inflation data and easing concerns over a Federal Reserve rate hike. The S&P 500 rose 0.3%, the Nasdaq Composite gained 0.5%, while the Dow Jones Industrial Average edged down 0.04%.

As of 9:22 a.m. Jakarta time on Thursday, Japan’s Nikkei had jumped 1.59%, South Korea’s Kospi had surged 4.21%, Hong Kong’s Hang Seng had slipped 0.16%, and the Shanghai Stock Exchange Composite Index had gained 0.41%.

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