Jakarta. Indonesian stocks erased early-session stability and closed sharply lower on Wednesday, with the benchmark Jakarta Composite Index (JCI) falling 95 points, or 1.48%, to 6,405 as investors weighed domestic political risks, the Bank Indonesia leadership transition and a range of global developments.

The index moved between 6,405 and 6,532 during the session. Trading volume reached 42 billion shares, with a turnover of Rp 18 trillion ($1 billion) across more than 2.5 million transactions. Declining stocks outnumbered gainers 583 to 118, while 89 shares were unchanged.

JCI had opened the day relatively steady, slipping just 4 points, or 0.07%, to 6,496 in the first session. Investors were initially tracking developments in the Middle East, oil prices, Chinese policy prospects, Indonesia's economic outlook and the planned change in Bank Indonesia's leadership.

Pilarmas Investindo Sekuritas said investors were assessing Indonesia's growth prospects after Fitch Ratings described the government's 6% economic growth assumption for 2027 in the draft 2027 state budget as more realistic.

Fitch, however, flagged several risks, including geopolitical uncertainty, higher oil prices and the possibility of less disciplined fiscal policy, which could affect Indonesia's ability to meet its growth target.

The market was also watching the parliamentary fit-and-proper test for Bank Indonesia governor candidate Destry Damayanti, scheduled for Wednesday. Destry is the sole candidate nominated by the government for the position.

"Market participants are awaiting the prospective governor's views and strategy on the direction of monetary policy, inflation control, rupiah stability and efforts to maintain foreign capital inflows," Pilarmas said.

Investors were also monitoring a planned demonstration at the MPR/DPR parliamentary complex on Thursday, including demands related to the passage of the Asset Forfeiture Bill.

National security and political stability remain a concern for investors, as social and political conditions can influence market sentiment and investment decisions.

"Market participants hope the demonstration will proceed peacefully so that domestic security and stability can be maintained," Pilarmas wrote in its Wednesday research note.

Globally, developments in the Middle East conflict have begun to provide some relief to financial markets.

"There are signs of progress in talks aimed at easing the conflict, reducing concerns over potential disruptions to energy supplies," Pilarmas said.

Pakistan said it had made significant progress in talks with Tehran aimed at ending the war. Separately, the foreign ministers of Iran and Oman discussed plans to establish a temporary transit corridor through the Strait of Hormuz, as well as mine-clearing projects along the route.

The developments helped push oil prices lower and ease concerns over disruptions to energy supplies, potentially reducing pressure on global inflation.

Investors were also awaiting signals from China's National People's Congress Standing Committee meeting, which runs from Aug. 25-28, as markets look for fresh policy support following signs of weakness in several economic indicators.

"Investors hope the Chinese government will again roll out policies to support economic growth," Pilarmas said.

Elsewhere in Asia, Japan's Nikkei rose 0.6% to 66,262, while South Korea's Kospi jumped nearly 1%. Hong Kong's Hang Seng gained 0.6%, and the Shanghai Composite also rose 0.6%.

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