Jakarta. Jakarta Composite Index (JCI) plunged 1.72%, or 102 points, on Friday as global risk-off sentiment and mounting concerns over Indonesia's investment climate triggered broad-based selling.

The benchmark index closed at 5,830 after trading within a range of 5,830 to 6,045. Trading volume reached 20.7 billion shares with a turnover of Rp 12.7 trillion ($710.25 million) across more than 1.5 million transactions. A total of 123 stocks advanced, 562 declined, and 129 were unchanged.

Pilarmas Investindo Sekuritas said Asian markets tracked overnight losses on Wall Street as investors continued to assess the US Federal Reserve's interest rate outlook following the release of May's Personal Consumption Expenditures (PCE) inflation data, which came in line with expectations.

Although the data eased concerns over an imminent rate hike, "the market still estimates an approximately 80% probability that the Fed will raise interest rates in December," Pilarmas wrote in its Friday research note.

Meanwhile, the probability of a September rate hike stands at around 63%, according to the CME FedWatch Tool.

New York Federal Reserve President John Williams said inflationary pressures are expected to ease this year but remain well above the central bank's target. Chicago Federal Reserve President Austan Goolsbee shared a similar view, saying inflation in the services sector has begun to improve, although overall price pressures remain far from the Fed's objective.

On the domestic front, Pilarmas said investor sentiment was also weighed down by growing concerns over Indonesia's investment climate, particularly following the enactment of Law No. 4/2026, which amends the Financial Sector Development and Strengthening (P2SK) Law.

The brokerage highlighted Article 50A, which provides legal protection for investors in Patriot Bonds and Merah Putih Bonds, saying some market participants believe the provision could create negative perceptions of Indonesia's financial governance.

"Concerns have emerged because the policy is seen as potentially increasing money laundering risks and undermining investor confidence in the integrity of Indonesia's regulatory framework," Pilarmas said.

Investor sentiment was further pressured after Indonesia dropped eight places to 48th out of 70 economies in the IMD World Competitiveness Ranking 2026.

"The decline was driven by weaker business efficiency, government effectiveness, and infrastructure quality," Pilarmas said.

Across Asia, Japan's Nikkei 225 fell 4.2% to 69,360, while South Korea's Kospi slumped 5.8% to 8,411, although both indexes recovered part of their earlier losses.

Hong Kong's Hang Seng Index dropped 1.8% to 22,667, while China's Shanghai Composite Index declined 2.3% to 4,027.

In South Korea, market movements continued to be driven by Samsung Electronics and chipmaker SK Hynix, both of which are collaborating with Nvidia on artificial intelligence technologies.

Overnight, US stocks finished mixed after renewed volatility in artificial intelligence-related shares. Apple slid 6.1% after raising prices on several of its products.

The S&P 500 edged down less than 0.1% after swinging between gains and losses throughout the session. The Dow Jones Industrial Average added 71 points, or 0.1%, while the Nasdaq Composite fell 0.5%.

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