Jakarta. Jakarta Composite Index (JCI) slipped into negative territory at Friday’s close, edging down 8.64 points or 0.10% to finish at 8,609.

Trading activity remained robust, with volume reaching 40.22 billion shares and turnover totaling Rp 46.59 trillion ($2.78 billion) across about 2.2 million transactions. Market breadth was negative, with 197 stocks advancing, 473 declining and 133 unchanged.

Several small-cap stocks still posted sharp gains. Bersama Mencapai Puncak (BAIK) jumped 34.78%, while Tunas Alfin (TALF) surged 25%. Abadi Lestari (RLCO) and Superbank Indonesia (SUPA) climbed 24.88% and 24.87%, respectively. On the losing side, Prasidha Aneka (PSDN) and Armada Berjaya Trans (JAYA) both fell 15%, while Pelayaran Jaya Hidup Baru (PJHB) and Gowa Makassar Tourism Develop (GMTD) each dropped 14.90%.

Pilarmas Investindo Sekuritas said in its research that Chinese equities strengthened after reports of a planned $11 billion US arms sale to Taiwan drew a strong response from Beijing, fueling speculation that China could step up efforts to bolster its military capabilities. Domestically, the firm said that JCI losses were relatively contained, even as the World Bank warned that recent major disasters in Sumatra could weigh on Indonesia’s economic growth and increase pressure on the government to accelerate recovery measures. Sentiment was also dented by pushback from labor unions and business groups opposing the government’s proposed 2026 wage formula, citing limited consultation and concerns that it did not reflect current economic conditions.

Across the region, Asian stocks mostly advanced after the Bank of Japan raised its key policy rate on Friday to its highest level in 30 years, while US inflation cooled more than expected. The widely anticipated 25-basis-point hike lifted the benchmark rate to 0.75%, the highest since 1995, though still low compared with other major economies.

In Tokyo, the Nikkei 225 gained 1% to 49,507, leading gains among major Asian markets.

Following the decision, Japan’s 10-year government bond yield climbed above 2% for the first time since May 2006.

Markets appeared to take the BOJ move in stride. “The Bank of Japan’s decision to raise interest rates at its meeting today was clearly signaled ahead of time and therefore came as no surprise,” Capital Economics economist Abhijit Surya said, noting that financial markets had almost fully priced in the hike.

Elsewhere in Asia, Hong Kong’s Hang Seng index rose 0.8% to 25,713.56, the Shanghai Composite added 0.4% to 3,890.43, and South Korea’s Kospi climbed 0.7% to 4,020.

Regional sentiment was also supported by optimism over further Federal Reserve rate cuts after the US reported a lower-than-expected 2.7% rise in November inflation, potentially giving the Fed more room to ease policy as the labor market cools.

In Europe, stock indexes gained on Thursday after the Bank of England cut its key interest rate and the European Central Bank kept rates unchanged. However, analysts cautioned that the latest US inflation data may not significantly sway the Fed, given recent volatility in economic indicators following the 43-day US government shutdown. The inflation report itself was delayed by eight days, and the shutdown also prevented the Labor Department from compiling full consumer price and core inflation data for October. December’s inflation report is expected to provide a clearer picture.

On Wall Street on Thursday, the S&P 500 rose 0.8% to 6,774 after a four-day losing streak. The Dow Jones Industrial Average gained 65 points to 47,951, while the Nasdaq Composite jumped 313 points to 23,006.