Jakarta. Indonesia’s benchmark stock index opened lower on Thursday as investors stayed on the sidelines ahead of a series of key events, including Bank Indonesia’s policy decision, the MSCI market review, and FTSE index rebalancing.

Jakarta Composite Index (JCI) fell 29 points, or 0.46%, to 6,191 in early trading, moving within a range of 6,126 to 6,197.

Within the first five minutes of trading, market turnover reached Rp 1.13 trillion ($63.2 million) from 1.7 billion shares traded across more than 160,000 transactions. Losers outnumbered gainers, with 363 stocks declining, 161 advancing, and 157 unchanged.

Investors remained cautious ahead of Bank Indonesia’s Board of Governors meeting later on Thursday, as well as the MSCI Global Market Accessibility Review and the FTSE index rebalancing scheduled for Friday.

“Adding to market uncertainty is the MSCI Annual Market Classification Review on June 24, 2026,” brokerage firm Phintraco Sekuritas wrote in a research note on Thursday.

The brokerage noted that the rupiah weakened 0.21% to Rp 17,762 per US dollar in the spot market on Wednesday.

According to market consensus, Bank Indonesia is expected to raise its benchmark interest rate by 25 basis points to 5.75%. However, economists remain divided between a rate hold and another 25-basis-point increase.

Phintraco said easing geopolitical tensions, lower crude oil prices, moderating inflation concerns, and Bank Indonesia’s earlier aggressive tightening cycle support the case for keeping rates unchanged.

“On the other hand, because Bank Indonesia’s main priority is to strengthen rupiah stability, there remains room for another rate hike,” the brokerage said.

Phintraco outlined three possible outcomes from MSCI’s upcoming review.

First, if MSCI maintains Indonesia’s status in the Emerging Markets Index while continuing to freeze the inclusion of Indonesian stocks, the impact on the JCI is expected to be neutral to slightly positive.

Second, a downgrade to Frontier Market status would likely trigger capital outflows and spark panic among domestic investors, creating negative pressure on the benchmark index.

“Third, if MSCI maintains Indonesia’s Emerging Market status and increases the country’s weighting due to improved market accessibility and transparency, it could become a positive catalyst that extends the JCI’s rebound,” Phintraco said.

Regional sentiment was also weighed down by overnight losses on Wall Street after the US Federal Reserve signaled that interest rates could still rise this year to contain inflation.

The S&P 500 fell 1.2%, reversing earlier gains after the Fed’s updated projections showed that nine of 18 policymakers expect at least one rate increase this year. The Dow Jones Industrial Average swung from a gain of 280 points to close down 507 points, or 1%, while the Nasdaq Composite lost 1.3%.

Federal Reserve Chair Kevin Warsh, who did not provide an interest rate forecast for 2026, said the central bank is considering changes to how it communicates with markets and the public.

One of his first policy shifts was ending the use of “forward guidance” in Fed statements, removing explicit signals about the future path of interest rates.

Warsh said investors should respond more to incoming economic data, including inflation and labor market indicators, rather than attempting to anticipate the Fed’s next move. He also indicated the central bank may revise its quarterly projections for interest rates, economic growth, and inflation.

Meanwhile, as of 9:10 a.m. Jakarta time, Japan’s Nikkei 225 rose 1.68%, South Korea’s Kospi gained 0.39%, and China’s Shanghai Composite edged up 0.19%. Hong Kong’s Hang Seng, however, fell 1.45%.

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