Jakarta. Jakarta stocks rebounded on Thursday, rising 18 points, or 0.28%, to 6,455 at the open after six consecutive sessions of losses, as investors weighed tighter US monetary policy against domestic investment developments.

Jakarta Composite Index (JCI) traded between 6,450 and 6,479 in early trading. Data from RTI showed that 1.04 billion shares had changed hands, with a total transaction value of Rp 444.61 billion ($25 million) across 64,345 transactions. A total of 305 stocks advanced, 144 declined and 219 were unchanged.

Kiwoom Sekuritas Indonesia said global sentiment remained negative as investors began pricing in the possibility of further US monetary tightening. Pressure on technology stocks also weighed on sentiment amid concerns over AI safety and development.

The Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75% to 4.00%, from 3.50% to 3.75%. Its latest projections put the median federal funds rate at 4.1% by the end of 2026, while at least 12 Federal Open Market Committee members expect another rate hike this year.

Pluang Research said the increase marked a significant policy shift after more than three years of the Fed holding back from raising rates. Fed Chair Kevin Warsh argued that financial conditions remained too loose to effectively curb inflation, making the latest move an attempt to tighten monetary policy.

“The firm statement was immediately interpreted by the market as a signal that the era of accommodative monetary policy has ended,” Pluang said in its report on Thursday. “What makes this decision more significant than a typical rate hike is the sharp change in the outlook. In June, only six officials expected two rate hikes, but now 16 of the 19 officials project at least one additional hike this year,” it added.

Markets have priced in an even more aggressive tightening cycle, anticipating three rate hikes by the middle of next year. Despite the latest increase, the Fed pushed back its target for bringing inflation down to 2% from 2028 to 2029, acknowledging that the fight against inflation would take longer than previously expected.

Domestically, Kiwoom said Fitch Ratings had affirmed the Indonesia Investment Authority's (INA) credit rating at BBB with a Negative Outlook, in line with Indonesia's sovereign rating. Fitch also affirmed INA's national-scale rating at AAA(idn) with a Stable Outlook.

Fitch considers government support for INA “Virtually Certain,” assigning it a Support Score of 45 out of 60. The assessment reflects strong operational and financial ties between the sovereign wealth fund and the government. The Negative Outlook follows Indonesia's sovereign outlook, while INA's national-scale rating remains stable.

Kiwoom also highlighted strengthened investment cooperation between Indonesia and China through the Two Countries Twin Parks (TCTP) initiative, which focuses on industrial estate development, supply chain integration, technology transfer and value-added improvements. A new memorandum of understanding recorded an investment commitment of around RMB 19.4 billion, equivalent to Rp 51 trillion, bringing total TCTP commitments to approximately Rp 88.1 trillion. “The government will push for accelerated implementation and realization of investment, particularly in strategic industrial estate projects in Indonesia,” Kiwoom said.

US stocks closed lower on Wednesday, with the S&P 500 falling 0.45% and the Dow Jones Industrial Average declining 1.21%.

The Nasdaq Composite edged down 0.01%. Major indexes reversed early gains to end the session in negative territory, with the Dow recording the steepest decline.

Asian markets were mixed as of 9:29 a.m. Jakarta time. Tokyo's Nikkei 225 edged up 0.06%, while Seoul's Kospi gained 0.01%. Hong Kong's Hang Seng Index fell 1.18%, while Shanghai's SSE Composite Index slipped 0.57%.

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