Jakarta. Indonesian equities extended gains this week as investors weighed improving regional economic data, central-bank policy signals, and developments in global markets.

The Jakarta Composite Index (JCI) rose 1.93% during the four trading days through Aug. 21, closing at 6,525.6, compared with 6,401.8 a week earlier. Total market capitalization on the Indonesia Stock Exchange increased 1.83% to Rp11,449 trillion ($649 billion), adding Rp206 trillion ($11.67 billion) from the previous week. Average daily trading value also rose 2.36% to Rp15.57 trillion.

Foreign investors provided some support, recording net purchases of Rp974.5 billion on Friday. They remained net sellers for the year, however, with cumulative outflows reaching Rp70.64 trillion, highlighting continued caution toward Indonesian assets despite the recent market rebound.

Market sentiment was also supported by Bank Indonesia’s commitment to exchange-rate stability and capital inflows. The central bank kept its inflation target at 1.5%-3.5% for 2026 and 2027 and said it would expand hedging incentives while intervening in domestic and offshore markets. Bank Indonesia also said Indonesia’s balance of payments remained resilient, with the second-quarter deficit narrowing sharply to $900 million from $9.1 billion in the first quarter.

Across Asia, investors took encouragement from stronger Japanese manufacturing data while awaiting further policy signals from China. Japan’s S&P Global Manufacturing PMI climbed to 55.1 in August from 54.5 in July, marking an eighth consecutive month of expansion and the sector’s strongest growth since April. New orders posted their fastest increase since January 2018. China’s central bank, meanwhile, left its one- and five-year Loan Prime Rates unchanged at 3% and 3.5%, respectively, ahead of a key meeting of the National People’s Congress Standing Committee next week.

Global risks remained. US Treasury yields stayed elevated amid concerns over government borrowing, while oil prices rose as Washington prepared sweeping sanctions on Iran amid tensions surrounding the Strait of Hormuz. In Indonesia, investors are also watching the stock exchange’s plan to remove the Rp50 minimum share price, which could improve price discovery and liquidity but potentially increase speculative trading in penny stocks.

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