Jakarta. Indonesian stocks rose 0.95% on Friday, gaining 51 points to close at 5,439 as investor sentiment drew support from planned capital market reforms and expectations of investment by sovereign wealth fund Danantara in state-owned companies.

A total of 506 stocks advanced, 192 declined and 265 were unchanged. Trading value reached Rp 16.02 trillion ($885.66 million).

Pilarmas Investindo Sekuritas identified capital market reforms as one of the key factors supporting the Jakarta Composite Index (JCI). The Indonesia Stock Exchange (IDX) plans to exclude stocks classified as having highly concentrated share ownership from the composite index calculation starting Nov. 2, 2026.

“The move follows MSCI’s warning about the risk of Indonesia’s stock market being downgraded from emerging market status to standalone market status,” Pilarmas wrote in its research note on Friday.

Danantara’s investment plans are also expected to support shares of state-owned enterprises (SOEs), Pilarmas said. Consistent buying activity, accompanied by improving corporate performance, could strengthen investor sentiment toward state-owned companies.

Investors are particularly focused on SOE-listed companies considered attractively valued and to have strong long-term business prospects. However, the sustainability of the positive impact will depend on the actual realization of investments and improvements in corporate fundamentals, Pilarmas said.

The gains in Jakarta came as Asian markets remained under pressure from concerns over the sustainability of artificial intelligence (AI) investments, which triggered selling in technology and semiconductor stocks.

Semiconductor manufacturers, memory chipmakers and other companies linked to AI faced significant selling pressure. “Investor concerns over the scale of investment in the AI sector have also weighed on global market sentiment,” Pilarmas said.

Geopolitical tensions in the Middle East added to market uncertainty. Reports that the United States and Israel could launch new attacks against Iran after next month’s US midterm elections heightened concerns over the region’s stability.

Earlier, the Iran-backed Houthi militant group in Yemen claimed responsibility for an attack on Saudi Arabia’s Yanbu port. Reports of attacks on oil facilities and airports in the world’s largest crude oil-exporting country also fueled concerns about potential energy supply disruptions.

“If supply disruptions occur, energy prices could rise and add to global inflationary pressures. This could pose a challenge for financial markets, although the JCI was still able to strengthen during the first trading session today,” Pilarmas said.

Asian stocks were mixed on Friday, with some markets recovering from early losses.

Tokyo’s Nikkei 225 fell 0.3%, while South Korea’s Kospi recovered from an early decline to gain 0.3%. Hong Kong’s Hang Seng Index climbed 0.7%, and the Shanghai Composite Index added 0.9%.

On Thursday, US stocks suffered a broad sell-off in technology shares, with the S&P 500 falling 1.2% for its worst daily performance since July. The Nasdaq Composite plunged 2.6%.

Weakness in technology stocks overshadowed gains elsewhere in the US market, where most stocks advanced. The Dow Jones Industrial Average edged up less than 0.1%.

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