Jakarta. Indonesia’s benchmark Jakarta Composite Index (JCI) posted a strong rebound this week, gaining 4.5 percent to close at 8,271.7 on Friday, up from 7,915.6 the previous week.

The surge pushed the Indonesia Stock Exchange’s (IDX) total market capitalization up 3.31 percent to Rp 15,234 trillion ($925 billion) from Rp 14,746 trillion a week earlier.

Despite the rally, trading activity showed signs of cooling. The average daily transaction frequency fell 12.91 percent to 2.36 million trades, down from 2.71 million the previous week. The average daily transaction value also slipped 18.85 percent to Rp 22.28 trillion, while the average daily volume dropped 19.70 percent to 30.47 billion shares.

Foreign investors recorded a net buy of Rp 1.15 trillion during the week, helping support the market’s upward momentum. However, on a year-to-date basis, foreign investors remain net sellers, unloading Rp 47.32 trillion worth of Indonesian equities since the beginning of 2025.

Pilarmas Investindo Sekuritas said market sentiment improved following signs of a thaw in US–China relations, with Vice Premier He Lifeng expected to meet US Treasury Secretary Bessent and Trade Representative Greer at the ASEAN Summit in Malaysia this week.

On the domestic front, investors were encouraged by expectations of lower interest rates, following remarks from Finance Minister Purbaya that inflation remains under control. He said Bank Indonesia still has room to cut its benchmark rate further to 3.5 percent if inflation stays around 2.5 percent, a move that could support business competitiveness and sustain economic momentum.

Global markets also showed similar enthusiasm. In the US, the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all closed at record highs on Friday following a softer-than-expected inflation reading. The Dow jumped 472 points (1 percent), while the Nasdaq gained 1.1 percent.

The inflation data raised hopes that the Fed could continue reducing interest rates to stimulate growth and ease pressure on the job market. Traders now anticipate further cuts in the Fed’s next two meetings, including one next week.