Jakarta. Jakarta stocks surged 5.65% on Tuesday, gaining 282 points to close at 5,278 as efforts by Indonesian regulators to restore investor confidence helped the market rebound from recent losses triggered by concerns over the country’s global market classification.

A total of 694 stocks advanced, while 111 declined and 158 remained unchanged. Trading value reached Rp 26.3 trillion ($1.46 billion).

Pilarmas Investindo Sekuritas said the rebound came as regulators sought to restore confidence after MSCI warned that Indonesia could be downgraded to standalone market status in its global indexes next year.

The government, regulators and self-regulatory organizations (SROs) have joined forces to overhaul the domestic capital market. Investors are closely watching policies introduced by the Indonesia Stock Exchange (IDX) as authorities work to address concerns over market transparency and investability.

As part of the reform efforts, the IDX is developing a new mechanism to calculate the Jakarta Composite Index (JCI) that would exclude issuers with highly concentrated share ownership, known as High Shareholding Concentration (HSC). The proposal follows a virtual discussion between the IDX and MSCI, the global index provider, aimed at maintaining market quality.

Global sentiment remained fragile, however, as investors assessed consumer purchasing power and the stability of the world economy. One key concern is whether heavy investment in artificial intelligence (AI) can continue to drive profitability at technology companies.

Markets remain under pressure from concerns over AI infrastructure financing, elevated borrowing costs and uncertainty over whether massive investments will generate sufficient returns.

Global stocks were mostly lower in cautious trading on Tuesday, as a rebound in AI-related shares on Wall Street failed to lift broader sentiment, with other sectors remaining volatile and oil prices staying elevated.

In Asia, Japan’s Nikkei 225 fell 1.3%, South Korea’s Kospi dropped 3.7% and Hong Kong’s Hang Seng declined 1.3%. The Shanghai Composite edged up 0.1%.

Wall Street closed mixed overnight, with technology stocks supporting the S&P 500 and Nasdaq Composite despite pressure on banking shares. The S&P 500 rose 0.41%, while the Nasdaq Composite gained 1.11%. The Dow Jones Industrial Average slipped 0.07%.

Add as a preferred source on Google +