Jakarta. Indonesian stocks opened lower on Thursday, with the Jakarta Composite Index (JCI) falling 15 points, or 0.24%, to 6,390 as concerns over shrinking fiscal space for regional governments added to caution over the Federal Reserve’s interest rate outlook.

The index moved between 6,376 and 6,432 in early trading. Volume reached 3.2 billion shares, with turnover totaling Rp1.2 trillion ($67.52 million) across more than 213,000 transactions. A total of 344 stocks gained, while 172 declined and 182 were unchanged.

Phintraco Sekuritas said Bank Indonesia (BI) plans to strengthen its monitoring of foreign exchange flows by utilizing supervisory technology, amid increasingly complex cross-border transactions and potential under-invoicing practices in exports.

The tighter oversight is aimed at optimizing data management and protecting national economic sovereignty. To support the effort, BI will strengthen coordination and policy implementation with government ministries, agencies, and other stakeholders.

Phintraco also highlighted the government's planned stimulus measures, including a projected Rp15.37 trillion allocation for the Indonesia Smart Card for Higher Education, or KIP Kuliah, in 2027. The budget is expected to support 966,623 student beneficiaries.

The allocation is slightly higher than the Rp15.3 trillion budget projected for 2026.

“This stimulus is expected to help boost household purchasing power and expand access to higher education for students from poor and vulnerable families,” Phintraco Sekuritas said.

Kiwoom Sekuritas Indonesia said the trend toward fiscal recentralization is expected to continue in 2027 as central government spending increasingly flows directly into regions, while fiscal space through Transfers to Regions (TKD) remains limited.

TKD for 2027 is projected at Rp735 trillion, up 5.5% from the 2026 outlook, but still well below the 2025 ceiling and the realization recorded in 2023.

“Central government spending through the Free Nutritious Meal Program, or MBG, of around Rp240 trillion and social protection spending of around Rp550 trillion will continue to support regional economic activity. However, an increasingly larger share of spending sits outside regional budgets, potentially narrowing local governments’ room to set their own development priorities,” Kiwoom said.

Global sentiment also remained cautious after US annual inflation in July rose to 3.7%, slightly above expectations of 3.6%, while the US economy grew 1.5% in the second quarter, according to Kiwoom.

The data added uncertainty over the Federal Reserve’s monetary policy direction ahead of its September meeting.

“Investors will now watch upcoming economic data as well as Fed Chair Kevin Warsh’s speech at Jackson Hole on Friday for further clues on the interest rate outlook,” Kiwoom said.

Wall Street closed slightly lower overnight as investors took a cautious stance ahead of Nvidia’s earnings report, which is seen as an important indicator of whether momentum in the artificial intelligence sector can be sustained.

The Dow Jones Industrial Average fell 0.21%, while the S&P 500 slipped 0.02% and the Nasdaq Composite declined 0.08%.

“Nvidia fell 1.6% ahead of the release of its quarterly results, while the healthcare sector was the weakest-performing sector in the S&P 500. Meanwhile, Meta and Apple each gained around 1.1%,” Kiwoom said in its Thursday research note.

As of 8:48 a.m. Jakarta time, Japan’s Nikkei fell 0.18%. South Korea’s Kospi gained 1.60%, while Hong Kong’s Hang Seng edged up 0.04%. Shanghai’s SSE Composite rose 0.16%.

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