Jakarta Stocks Rally 2.7% Despite MSCI Outflow Risks, Political Uncertainty

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Indonesian stocks rally 2.7% as positive sentiment offsets MSCI-related outflow risks and political uncertainty.

Jakarta. Indonesian stocks rallied 2.66% on Thursday, gaining 135 points to close at 5,250, as positive sentiment from China's monetary policy support and domestic market reforms outweighed concerns over US interest rates, geopolitical tensions and political uncertainty.

Jakarta Composite Index (JCI) traded between 5,114 and 5,250 throughout the session. Trading volume reached 41.1 billion shares, with a total transaction value of Rp 11.94 trillion ($654.72 million) across more than 1.5 million transactions. A total of 496 stocks advanced, 115 declined and 105 remained unchanged.

In its research note, Pilarmas Investindo Sekuritas said China's commitment to strengthening monetary policy support was among the positive factors supporting the market. China's central bank pledged to step up countercyclical policy adjustments and boost domestic demand to support sustainable economic growth.

Another positive development came from the Indonesia Stock Exchange's (IDX) decision to add 300 stocks to its High Shareholding Concentration (HSC) category, bringing the total to 383 from 83 previously.

"The measure aims to protect retail investors and prevent movements in the JCI from being easily distorted by low-liquidity stocks," Pilarmas said, adding that the changes were also expected to improve transparency and strengthen global institutional investors' confidence in Indonesia's capital market.

However, the brokerage cautioned that external and domestic risks continued to weigh on investor sentiment.

Stronger-than-expected US inflation data raised expectations of another Federal Reserve rate increase in December, keeping investors cautious amid concerns over the impact of tighter monetary policy on global financial markets.

Geopolitical tensions between the US and Iran also remained a concern. Negotiations between the two countries were reportedly at an impasse after a senior Iranian security official said Tehran would not surrender its enriched nuclear material.

Domestically…

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