Jakarta. Jakarta Composite Index (JCI) climbed more than 1% on Thursday, outperforming most regional peers as investors shrugged off geopolitical tensions and focused on Indonesia's domestic policy outlook.

JCI gained 1.1%, or 66 points, to close at 6,108 after trading between 6,024 and 6,108. Trading volume reached more than 30.17 billion shares, with turnover totaling Rp 13.2 trillion ($734.19 million) across more than 2.3 million transactions. A total of 372 stocks advanced, while 238 declined and 185 were unchanged.

Pilarmas Investindo Sekuritas said most Asian markets weakened as investors monitored escalating tensions in the Middle East following additional US strikes on Iranian targets.

The renewed conflict sent oil prices sharply higher this week, reviving concerns over inflation and the outlook for interest rates. However, sentiment was partly eased after US President Donald Trump said on Wednesday that Tehran had indicated its willingness to resume negotiations.

Regional markets were also weighed down by weaker economic data from China. The world's second-largest economy posted its slowest GDP growth since the fourth quarter of 2022, falling short of the government's 2026 growth target range of 4.5% to 5%.

In response, the People's Bank of China pledged stronger policy support in the second half of the year, signaling it was prepared to use tools such as reserve requirement ratio (RRR) cuts and reverse repo operations while keeping the seven-day reverse repo rate as its primary policy benchmark.

Despite the cautious regional backdrop, Pilarmas said Indonesia's market remained supported by the government's preparations for fiscal and market measures to contain inflation, particularly volatile food prices and rising industrial costs. "S&P's decision to maintain Indonesia's sovereign credit rating continues to provide positive sentiment for domestic assets," Pilarmas said in a research note on Thursday.

The brokerage cautioned, however, that further gains could be limited if oil prices continue to rise. Crude has climbed above $80 per barrel amid renewed tensions between the US and Iran, increasing the risk of higher fiscal pressure.

According to Pilarmas, persistently high oil prices could weigh on the state budget and potentially widen Indonesia's fiscal deficit.

Separately, Kiwoom Sekuritas Indonesia said investors are also monitoring the government's plan to establish the Indonesia International Financial Center (PFII), which aims to attract global capital through incentives including tax rates as low as 0% for up to 50 years, greater legal certainty, and simplified regulations.

The financial hub is expected to strengthen Indonesia's competitiveness against Singapore, Dubai, and Labuan, encourage the repatriation of investments currently held through overseas special purpose vehicles (SPVs), and host investment banks, insurance companies, pension funds, and other financial institutions to deepen the domestic financial market.

Kiwoom also noted that Bank Indonesia's share of government bond (SBN) holdings rose to 27.41% as of July 10, 2026, from 22.61% at the end of 2025, while holdings by banks and foreign investors continued to decline.

"This reflects Bank Indonesia's growing role in maintaining stability in the bond market amid weak investor demand. While it helps contain volatility, it also signals increasing reliance on central bank financing, as reflected in the still-elevated 10-year government bond yield of 7.28%," Kiwoom said.

Most Asian markets closed lower on Thursday despite easing oil prices after several volatile sessions driven by the US-Iran conflict.

South Korea's Kospi fell 6.4% after the Bank of Korea delivered its first interest rate hike since 2023 to curb inflationary pressures linked to the conflict. Japan's Nikkei 225 dropped 2.8%, while China's Shanghai Composite lost 1.9%. Hong Kong's Hang Seng bucked the trend, rising 1.4%.

Overnight, Wall Street ended higher, with the S&P 500 gaining 0.4%, the Dow Jones Industrial Average adding 0.3%, and the Nasdaq Composite advancing 0.6%.