Jakarta. Hopes of a diplomatic breakthrough between the US and Iran unraveled overnight, flipping global sentiment and dragging the Jakarta Composite Index (JCI) down 31 points, or 0.41%, to 7,528 at Wednesday’s open, as investors also digested MSCI’s decision to maintain Indonesia’s market classification while acknowledging initial reform progress.

The benchmark index traded in negative territory within a range of 7,523–7,547 in early deals.

Based on RTI data, 1.23 billion shares had changed hands in the opening minutes, with total transaction value reaching Rp 542.65 billion across 107,982 trades. Gainers outnumbered decliners, with 271 stocks advancing, 157 falling, and 227 unchanged.

Kiwoom Sekuritas Indonesia said sentiment had initially leaned positive on expectations that US–Iran peace talks would continue. However, that optimism quickly faded.

Wall Street reversed course after an early rally, with the S&P 500 falling 0.6%. The Dow Jones Industrial Average dropped 293 points, or 0.6%, after erasing an earlier gain of 400 points, while the Nasdaq Composite also slipped 0.6%.

Oil prices reflected the same volatility. Brent crude swung from below $95 to around $100 during the session before settling at $98.48, up 3.1%.

The shift in sentiment was triggered by mounting uncertainty around the talks. Reports indicated that US Vice President JD Vance did not depart for Pakistan as Iran had yet to respond to Washington’s proposal. Tehran later signaled it had not decided on participation, before reports emerged that it would not attend talks unless the blockade was lifted.

Tensions escalated further following the US seizure of an Iranian vessel and rocket launches by Hezbollah in Lebanon, reinforcing concerns that the ceasefire remains increasingly fragile ahead of its deadline.

“Market repricing occurred from midday until the close, with stocks reversing downward, oil rising, and investors returning to safe-haven assets. Only after the US market close did Trump announce a ceasefire extension, citing that Iran does not yet have a unified negotiation proposal. Nevertheless, the US continues the blockade and stated military readiness if an agreement is not reached, while Iran labeled the blockade an act of war,” Kiwoom said in a research note on Wednesday.

On the domestic front, the Indonesia Stock Exchange (IDX) and the Financial Services Authority (OJK) struck a constructive tone following MSCI’s latest update, which kept Indonesia’s status unchanged while recognizing parts of its reform agenda.

IDX said it has submitted improvement proposals, some of which have been acknowledged, and will continue intensive engagement with MSCI and global investors. Meanwhile, OJK viewed MSCI’s initial recognition of transparency reforms, including disclosure thresholds above 1%, investor classification, HSC, and the 15% free float roadmap, as validation of its policy direction.

“Both emphasized a commitment to maintaining consistent and sustainable reform implementation, while utilizing the follow-up MSCI assessment process as momentum to prove policy effectiveness and increase the credibility and attractiveness of the Indonesian capital market,” Kiwoom said.

Across Asia, markets also opened lower. Japan’s Nikkei 225 fell 0.14% to 59,104, South Korea’s Kospi slipped 0.01% to 6,387 and traded volatile, Hong Kong’s Hang Seng Index dropped 0.69% to 26,303, and China’s Shanghai Composite declined 0.27% to 4,074.