Jakarta. Indonesia's benchmark stock index edged lower at Wednesday's opening as stronger foreign exchange reserves helped cushion concerns over a widening fiscal deficit and the risk of profit-taking.

Jakarta Composite Index (JCI) slipped 2 points, or 0.04%, to 5,984 in early trading, moving within a range of 5,955 to 5,984.

RTI data showed 799.92 million shares changed hands in the opening minutes, with trading value reaching Rp 439.39 billion ($24.4 million) across 107,587 transactions. Gainers outnumbered losers, with 158 stocks advancing, 253 declining, and 227 remaining unchanged.

Phintraco Sekuritas said positive sentiment was supported by the House of Representatives' proposal to reduce funding for the Free Nutritious Meals (MBG) program in the 2027 budget, along with June's increase in Indonesia's foreign exchange reserves after they had fallen to a two-year low.

Indonesia's foreign exchange reserves rose to $145.6 billion in June 2026 from $144.9 billion in May, driven mainly by tax and services receipts that more than offset government external debt repayments and Bank Indonesia's rupiah stabilization measures.

The reserve level was equivalent to 5.5 months of imports, or 5.4 months of imports and government external debt servicing, well above the international adequacy standard of around three months of imports.

"Technically, the JCI closed above its 20-day moving average (MA20), while the MACD continues to indicate buying interest. However, several negative catalysts could trigger profit-taking," Phintraco Sekuritas wrote in a research note.

One of those risks stems from Indonesia's fiscal outlook. The state budget recorded a Rp 196.5 trillion ($10.9 billion) deficit, equivalent to 0.76% of GDP, in the first half of 2026.

The Finance Ministry now projects the full-year 2026 budget deficit will widen to Rp 734.3 trillion, or 2.85% of GDP, exceeding the original target of Rp 689.1 trillion, or 2.68% of GDP.

Although tax revenue is projected to grow 20.5% this year, the government aims to keep growth closer to 23% without raising tax rates or introducing new taxes. Meanwhile, state spending is forecast to reach Rp 3,942.4 trillion, or 102.6% of the budget ceiling.

"The projected budget deficit, which is wider than the original target, could become a negative market sentiment," Phintraco Sekuritas said.

Overnight, Wall Street ended lower after another sell-off in artificial intelligence-related stocks weighed on major indexes. The S&P 500 fell 0.4%, while the Nasdaq Composite dropped 1.2%. The Dow Jones Industrial Average lost 130 points, or 0.2%, retreating from its record high.

Across Asia, regional markets were mixed as of 9:27 a.m. Jakarta time. Japan's Nikkei 225 fell 1.05%, South Korea's Kospi slid 2.61%, Hong Kong's Hang Seng gained 1.72%, and China's Shanghai Composite edged up 0.11%.

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