JCI Pauses After 7.6% Rally as Investors Assess BI's Suprise Rate Hike
Jakarta. Jakarta Composite Index (JCI) was little changed on Wednesday morning, slipping 2 points or 0.03% to 5,744 despite a surprise interest-rate hike by Bank Indonesia and a sharp rebound in the previous session.
The benchmark index moved within a range of 5,677 to 5,838. After the first eight minutes of trading, volume reached 4.65 billion shares with turnover of Rp 3.5 trillion ($195.3 million) from more than 322,000 transactions. Gainers outnumbered losers 406 to 146, while 155 stocks were unchanged.
Market sentiment remained supported by Bank Indonesia's unexpected decision to raise its benchmark BI Rate by 25 basis points to 5.5% on Tuesday, outside its regular Board of Governors Meeting schedule.
"The move was positively received by the market, with the rupiah strengthening 0.65% to Rp 18,065 per US dollar," Phintraco Sekuritas wrote in a research note.
According to the brokerage, the central bank deemed further measures necessary to strengthen the rupiah and attract foreign capital inflows.
In addition to the rate hike, Bank Indonesia raised yields on its rupiah-denominated securities (SRBI) across the 6-, 9-, and 12-month tenors and lowered hedging swap costs for foreign investors by 10%.
The central bank also reopened repo auction windows for banks with 3-, 6-, 9-, and 12-month tenors and intensified rupiah and foreign-exchange monetary operations to support currency stability, Phintraco said.
Separately, the House of Representatives has coordinated with several institutions, including Danantara, BPJS Ketenagakerjaan, Taspen, and state-owned banks, to prepare measures aimed at responding to recent market volatility.
"One of the options being discussed is a share buyback plan involving state-owned banks listed on the Indonesia Stock Exchange," Phintraco Sekuritas said.
The JCI staged a dramatic relief rally on Tuesday, soaring 7.57%, or 404 points, to close at 5,746 after touching a year-low of 5,318 a day earlier, a key support area last seen during the 2020 pandemic.
Kiwoom Sekuritas Indonesia said the rebound was driven by the government's push for state-owned enterprise share buybacks and Bank Indonesia's surprise rate hike.
"This rally has temporarily halted market panic, but the factors that triggered the previous pressure — including foreign fund outflows, rising sovereign risk premiums, and concerns over fiscal conditions — have not entirely disappeared," Kiwoom said.
Economist Chatib Basri said Indonesia's economic fundamentals were not as weak as market sentiment suggested, noting that household consumption and government spending continued to support growth in the first quarter of 2026.
However, he warned that government spending growth of 20-22% would be difficult to sustain without stronger state revenue collection. According to Chatib, the rupiah's weakness reflects higher sovereign risk and worsening investor perceptions of Indonesia's fiscal position rather than solely the impact of the conflict in the Middle East.
Overnight, Wall Street ended mixed as another sharp reversal in artificial-intelligence stocks rattled investors. The S&P 500 fell 0.3% after swinging from a 1% gain to a 2.3% loss during the session. The Dow Jones Industrial Average rose 86 points, or 0.2%, while the Nasdaq Composite declined 1%.
Across Asia on Wednesday morning, Japan's Nikkei fell 0.89%, South Korea's Kospi dropped 2.64%, Hong Kong's Hang Seng lost 0.77%, and China's Shanghai Composite slipped 0.16%.
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