Jakarta. Jakarta stocks closed lower on Thursday after Bank Indonesia raised its benchmark interest rate and investors braced for the outcome of MSCI's market accessibility review, while hawkish signals from the Federal Reserve continued to dampen risk appetite.

Jakarta Composite Index (JCI) fell 48 points, or 0.78%, to 6,172 after moving within a range of 6,073 to 6,197. Trading volume reached 24.8 billion shares with a turnover of Rp 17.4 trillion ($973.4 million) across more than 1.81 million transactions. Declining stocks outnumbered gainers, with 419 shares falling, 258 advancing and 137 unchanged.

According to Pilarmas Investindo Sekuritas, investors remained cautious ahead of several key events that could shape the direction of domestic financial markets.

"Market participants are primarily focused on the outcome of Bank Indonesia's Board of Governors Meeting, which will be announced today," Pilarmas wrote in a research note on Thursday.

Bank Indonesia raised its benchmark interest rate by 25 basis points to 5.75% on Thursday in a bid to strengthen the rupiah amid heightened global uncertainty. The central bank also increased the Deposit Facility rate by 25 basis points to 4.75% and the Lending Facility rate by 25 basis points to 6.50%.

Investors are also awaiting the results of the MSCI Global Market Accessibility Review, which Pilarmas said could serve as an important catalyst for Indonesian equities.

The brokerage noted that investors hope Indonesia will retain its emerging market status and avoid policies that could dampen foreign investor interest.

However, Pilarmas said pressure on the JCI stemmed not only from domestic factors. Investors were also digesting the latest policy signals from the Federal Reserve under Chair Kevin Warsh.

As widely expected, the Fed kept its benchmark interest rate unchanged at 3.50%-3.75%. However, the US central bank indicated that further rate hikes remain possible as inflation has yet to return to its 2% target.

"Warsh reaffirmed the Federal Reserve's commitment to restoring price stability. The stance has strengthened expectations that US monetary policy will remain restrictive for longer," Pilarmas said.

Higher US Treasury yields and a stronger dollar have typically prompted investors to reduce exposure to riskier assets, including equities in emerging markets such as Indonesia.

Geopolitical developments also remained in focus after US President Donald Trump announced a temporary agreement with Iran aimed at ending hostilities and reopening the Strait of Hormuz.

According to details released by both countries, the agreement launches a 60-day negotiation period toward a permanent resolution over Iran's nuclear program. It also allows Iran to resume oil exports under a waiver of US-backed sanctions.

Pilarmas said the agreement had helped ease concerns over global energy supplies and the outlook for the world economy. However, investors are still awaiting full implementation of the deal, including confirmation that the strategic shipping route will reopen and that sanctions relief will proceed as planned.

In Asia, investor attention also turned to China's Lujiazui Forum, where the People's Bank of China (PBoC) signaled a possible shift in its monetary policy framework by adopting the overnight interest rate as its primary benchmark. Beijing is also preparing additional measures to cushion the economy against mounting external pressures.

With domestic and global uncertainties persisting, investors are likely to remain defensive while awaiting the MSCI review outcome and further clarity on the global interest rate outlook.

Elsewhere in the region, Japan's Nikkei 225 climbed 1.7% to a record close of 71,053, while South Korea's Kospi gained 2.3% to 9,063, supported by strong buying in technology stocks. Hong Kong's Hang Seng fell 2.1% to 23,792, while Shanghai's Composite Index slipped 0.4% to 4,090.

On Wall Street overnight, the S&P 500 dropped 1.2% after the Fed's updated projections showed that nearly half of policymakers expect at least one interest rate increase in 2026. The Dow Jones Industrial Average fell 1% and the Nasdaq Composite lost 1.3%.

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