Jakarta. Jakarta stocks edged higher on Wednesday as renewed oil price gains toward $100 a barrel raised concerns over inflation and limited room for central banks to ease monetary policy.

Jakarta Composite Index (JCI) gained 8 points, or 0.12%, to close at 6,678. The index traded between 6,642 and 6,707 during the session.

Trading volume reached 34.5 billion shares, with turnover totaling Rp 16.16 trillion ($923.27 million). More than 2.1 million transactions were recorded, with 308 stocks advancing, 317 declining and 169 unchanged.

Pilarmas Investindo Sekuritas said the renewed rise in global oil prices was among the main factors weighing on the market.

“Higher energy prices could increase inflationary pressures, limiting the room for central banks to ease monetary policy,” Pilarmas said in a research note on Wednesday.

Oil prices surged again after US forces destroyed five Iranian crude oil tankers near Kharg Island. The strikes came in retaliation for an attempted missile attack on US warships.

The US Secretary of State also said Washington would continue targeting Iranian oil tankers in response to attacks against US warships.

Tensions escalated further after the Iran-backed Houthi group launched an attack in southern Saudi Arabia, raising concerns that the US-Iran conflict could spread and disrupt global oil supplies.

Iran also launched ballistic missiles toward Jordan and issued warnings to ships in the Persian Gulf. Crews aboard oil tankers near ports in Kuwait and Bahrain were also warned.

“These conditions are prompting market participants to pay closer attention to the risk of energy supply disruptions, particularly if the escalation spreads to major oil distribution routes,” Pilarmas said.

Beyond geopolitical developments, investors are also watching US inflation data due this week. The figures will provide an important signal for expectations over the Federal Reserve’s policy direction ahead of its meeting next week.

“Higher oil prices could intensify inflationary pressures. If inflation rises again, expectations for interest rates to remain high for longer could strengthen, adding further pressure on risk assets, including stocks,” Pilarmas said.

The European Central Bank and Bank of Japan are also expected to tighten monetary policy this month, making the global interest-rate outlook a key concern for investors.

In China, annual consumer inflation rose to 0.8% in August from 0.5% in July, in line with market expectations. Producer price inflation also increased to 3.8% from 3.5% a month earlier, exceeding the 3.7% market forecast.

“The rise in inflation was mainly driven by higher energy costs amid ongoing tensions in the Middle East,” Pilarmas said.

Although China has emerged from a prolonged period of deflation, weak consumer demand continues to limit companies’ ability to pass higher costs on to households. The situation comes amid slowing economic growth and more measured fiscal support.

Domestically, Pilarmas said external pressures remained the main factor weighing on the JCI, although household consumption sentiment remained positive.

Bank Indonesia recorded a Consumer Confidence Index (CCI) of 118.5 in August, up from 116.8 in July.

“The increase shows that consumer confidence remains in the optimistic zone and is one of the pillars supporting the domestic economy amid pressure from global markets,” Pilarmas said.

Across Asia, Japan’s benchmark Nikkei 225 fell 0.2%, while South Korea’s Kospi gained 1.4%. Hong Kong’s Hang Seng Index dipped 0.3%, while the Shanghai Composite rose 0.4%.

Add as a preferred source on Google +