Jakarta. Indonesian stocks fell 0.44% to 5,917 in early trading on Thursday as concerns over US inflation and the Federal Reserve’s interest rate outlook weighed on global market sentiment, while a sharp sell-off in Asian technology shares deepened losses across the region.

Jakarta Composite Index traded between 5,881 and 5,917. A total of 2.13 billion shares changed hands in early trading, with a transaction value of Rp 356.63 billion ($19.87 million) across 64,155 transactions. Among the stocks traded, 95 rose, 359 declined and 205 remained unchanged.

Phintraco Sekuritas said the Jakarta Composite Index had closed 0.29% higher at 5,943. on Wednesday.

“However, investors should remain cautious as oil prices continue to rise and expectations of a Federal Reserve rate hike increase,” Phintraco Sekuritas wrote in its research note.

Investors are awaiting the United States’ producer price index (PPI) data, due on Thursday, which is expected to show producer inflation easing slightly to 5.3% year-on-year in September from 5.4% in August.

US retail sales data are also scheduled for release on Thursday and are expected to slow to 0.3% month-on-month in September from 1.2% in August.

Meanwhile, the United Kingdom is set to release its August gross domestic product data, which are expected to show a 0.1% month-on-month contraction, compared with 0.4% growth in July.

Kiwoom Sekuritas Indonesia said Wall Street closed lower on Wednesday after higher-than-expected US inflation data raised concerns over the direction of monetary policy and technology stock valuations.

The S&P 500 fell 1.1%, while the Nasdaq Composite dropped 2%. The Dow Jones Industrial Average declined by 49 points.

Domestically, Phintraco Sekuritas highlighted an industry projection pointing to stronger growth in Indonesia’s battery materials sector. The Indonesian Nickel Industry Forum (FINI) expects production capacity for battery raw materials to more than double to above 900,000 tons by the end of 2027.

“This is the result of domestic nickel downstream processing, particularly the production of mixed hydroxide precipitate (MHP),” Phintraco Sekuritas said.

The projected increase is driven by hydrometallurgical processing and refining projects using high-pressure acid leaching (HPAL) technology entering full operations.

“This will benefit the battery and electric vehicle industries by providing larger supplies and more competitive raw material costs,” Phintraco Sekuritas added.

Across Asia, markets were broadly lower as of 9:53 a.m. Jakarta time, with South Korean stocks suffering the steepest losses.

Japan’s Nikkei 225 plunged 4.81% amid reports that the Bank of Japan was reluctant to raise interest rates twice in quick succession this month, although it remained open to a rate adjustment in December.

“The divergence in policy direction between the two central banks is an important factor for the movement of bond yields, exchange rates, and international capital flows,” Kiwoom said.

South Korea’s Kospi plunged 7.60% to below 5,552 as a sell-off in technology shares intensified following Wall Street’s losses on stronger-than-expected US inflation data.

Hong Kong’s Hang Seng Index fell 1.14%, while the Shanghai Composite Index dropped 1.80%.

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