Jakarta. Jakarta stocks opened sharply higher on Tuesday as investors responded to signs of stronger domestic economic activity after Bank Indonesia reported a sharp pickup in bank lending, even as global markets remained cautious over Middle East tensions and rising oil prices.

Jakarta Composite Index (JCI) rose 41 points, or 0.67%, to 6,273 in early trading, moving within a range of 6,266-6,278.

RTI data showed around 1 billion shares had changed hands in the opening minutes, with trading value reaching Rp 449.57 billion (around $25 million) across 85,586 transactions. Gainers outnumbered losers, with 293 stocks advancing, 99 declining, and 253 remaining unchanged.

Phintraco Sekuritas said Bank Indonesia's latest Banking Survey showed the weighted net balance (WNB) of new loan disbursements surged to 93.08% in the second quarter of 2026, up from 38.74% in the first quarter and 85.22% in the same period last year.

The increase was driven by stronger lending across all loan categories. Working capital loans posted the highest balance at 94.34%, followed by investment loans at 93.51% and consumer loans at 83.67%.

Although Bank Indonesia noted banks tightened lending standards during the quarter, Phintraco said the stronger credit growth suggests economic activity remained expansionary as demand for financing continued to increase.

The brokerage also said domestic sentiment improved after S&P Global Ratings reaffirmed Indonesia's investment-grade sovereign rating at BBB with a stable outlook last week, helping restore investor confidence in the country's economic prospects.

"Investors should, however, remain cautious if higher oil prices persist, as they could revive expectations of further Federal Reserve rate hikes and continued US dollar strength," Phintraco said.

Kiwoom Sekuritas Indonesia noted that Indonesia's perceived risk had risen again, reflected in wider five-year and 10-year credit default swap (CDS) spreads, driven by higher global oil prices, expectations of tighter monetary policy, rising domestic inflation, and rupiah weakness.

"Consistency in maintaining fiscal discipline, monetary stability, and regulatory certainty will be essential to restore investor confidence and safeguard the stability of Indonesia's financial markets," Kiwoom said.

The brokerage added that the government has opened the possibility of lowering prices for non-subsidized fuels, including Pertamax, if global crude prices continue to weaken.

"Meanwhile, subsidized fuel prices will remain unchanged through the end of 2026, while national crude oil and fuel supplies are secured until year-end. This policy could help maintain domestic inflation stability if global energy prices continue to decline," Kiwoom said.

Globally, Kiwoom said investors remained cautious as markets weighed escalating geopolitical tensions in the Middle East against the start of the second-quarter earnings season.

"The ongoing military conflict between the US and Iran, along with rising oil prices, has once again fueled inflation concerns and increased uncertainty over the global economic outlook," it said.

As of 9:48 a.m. Jakarta time, Japan's Nikkei gained 1.74%, South Korea's Kospi climbed 1.85%, Hong Kong's Hang Seng slipped 0.16%, and China's Shanghai Composite fell 0.40%.

Overnight on Wall Street, stocks ended little changed as chipmakers and other artificial intelligence-related shares pared some of their recent losses. The S&P 500 slipped 0.2%, the Dow Jones Industrial Average fell 307 points, or 0.6%, while the Nasdaq Composite was nearly flat, edging down less than 0.1%.

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