Jakarta. Indonesia’s benchmark stock index edged closer to the psychologically significant 8,000 level on Monday, reflecting renewed investor confidence amid domestic economic optimism and global market shifts. The Jakarta Composite Index (JCI) closed up 68.05 points, or 0.87 percent, at 7,926.91, shrugging off street protests over a lawmakers’ pay hike that saw demonstrators clash with police using tear gas and water cannons.

Former Tourism and Creative Economy Minister Sandiaga Salahuddin Uno, a prominent market figure, attributed the gains to investor recognition of Indonesia’s economic prospects. “Compared with other major G20 and Asian markets, Indonesia still offers promising opportunities. Foreign inflows reflect confidence in our capital markets,” Sandiaga said at the Indonesia Stock Exchange (IDX) on Monday.

Foreign investor participation, which previously accounted for up to 70 percent of market capitalization, had fallen below 50 percent, he said, but recent trends indicate a resurgence of interest. Sandiaga identified three key drivers: attractive valuations relative to other emerging markets, political stability, and consistent economic growth above 5%, with potential to reach 8% if productive investment strengthens.

“Beyond banking, multiple sectors are expanding and catching the eye of global investors,” he added. Sandiaga disclosed that several community-backed companies across services, cosmetics, and high-growth industries are being prepared for initial public offerings within the next two to three years.

Approaching the 8,000 mark, he said, is more than a numerical milestone; it symbolizes investor confidence in Indonesia’s economic trajectory. “From the 80th anniversary of independence to the 8th president and an 8 percent growth target, the number eight signals that we are on the right path to strengthening national economic resilience,” he said.

Market analysts also highlighted favorable external factors. Oktavianus Audi Kasmarandana, Vice President of Marketing, Strategy & Planning at Kiwoom Sekuritas Indonesia, said potential global interest rate cuts, especially from the US Federal Reserve, could shift foreign funds from US government bonds to higher-yielding emerging market equities, including Indonesia. “If rate cuts are triggered by weak US labor data, funds may rotate back into safe-haven assets like gold,” he warned.

US Federal Reserve Chair Jerome Powell suggested a growing likelihood of a 25-basis-point rate cut at the September FOMC meeting. CME FedWatch currently prices an 87.2 percent probability of a cut.

Global index rebalancing, including MSCI and FTSE Russell, is expected to add liquidity to select Indonesian stocks through passive investments. Stable currency and solid domestic growth remain crucial for sustaining foreign inflows, which have already reached Rp 7.93 trillion, concentrated in large banking shares, with the potential to hit Rp 20–30 trillion by year-end if trends persist.

Despite net foreign selling in major banks since the start of the year --BBCA (Rp 17.6 trillion), BMRI (Rp 12.6 trillion), BBNI (Rp 3.4 trillion), and BBRI (Rp 1.5 trillion)-- analysts view the sector’s recovery as a key catalyst for the JCI. Audi projects the index to find support at 7,600 and resistance at 8,200 in Q3 2025.

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