JCI Seen Rebounding as Global Sentiment Improves

JAKARTA —Jakartaweekly.com. Indonesia’s benchmark stock index is expected to move higher on Monday (May 25), supported by stronger regional and global market sentiment after Wall Street closed in positive territory at the end of last week.

The U.S. market ended higher on Friday (May 22), with the Dow Jones Industrial Average rising 0.58%, the S&P 500 gaining 0.37%, and the Nasdaq Composite adding 0.19%. The Dow climbed more than 270 points to a record close as easing oil prices and renewed optimism over a potential resolution to tensions in the Middle East boosted investor confidence.

Meanwhile, the yield on the U.S. 10-year Treasury note declined 0.26% to 4.558%, while the U.S. Dollar Index slipped slightly by 0.02% to 99.24.

Commodity markets also delivered mixed but mostly positive performances. WTI crude oil rose 0.26% to USD 96.60 per barrel, while Brent crude gained 0.94% to USD 103.54 per barrel. Crude palm oil (CPO) increased 0.63% to MYR 4,486 per ton, while coal prices slipped 0.80% to USD 136.45 per ton. Gold prices declined 0.74% to USD 4,509 per ounce.

Asian equities also strengthened on Friday. Hong Kong’s Hang Seng Index rose 0.86%, Japan’s Nikkei surged 2.68%, and China’s Shanghai Composite advanced 0.87%.

Indonesia’s Jakarta Composite Index (JCI) climbed 1.10% to close at 6,162.05. However, foreign investors still recorded a net sell of IDR 309.5 billion, consisting of IDR 1.07 trillion net sell in the regular market and IDR 758.9 billion net buy in the negotiated market.

The largest foreign net sells in the regular market were seen in Bank Central Asia (BBCA), Bank Mandiri (BMRI), and Chandra Asri Pacific (TPIA). Meanwhile, the biggest foreign net buys were recorded in Merdeka Copper Gold (MDKA), Timah (TINS), and Vale Indonesia (INCO).

Top gainers included MDKA, EMAS, and BRMS, while TLKM, ASII, and BYAN were among the main laggards.

This morning, South Korea’s KOSPI market remains closed, while Japan’s Nikkei opened 2.10% higher. Analysts expect the JCI to rebound further after experiencing pressure over the past week, supported by improving regional sentiment and optimism in global markets.

However, investors are also monitoring Indonesia’s external balance conditions after the country posted a deeper current account deficit in the first quarter of 2026.

According to a macroeconomic update by Mirae Asset Sekuritas Indonesia analyst Novani Karina Saputri, Indonesia’s Balance of Payments recorded a deficit of USD 9.1 billion in the first quarter of 2026 amid mounting global economic pressures and financial market volatility.

The current account deficit widened to 1.1% of GDP from 0.7% in the previous quarter, marking the deepest deficit since the third quarter of 2020. In nominal terms, the USD 4.0 billion deficit was the largest since late 2019.

“The deterioration was mainly driven by a narrowing non-oil and gas trade surplus and a wider primary income deficit,” Novani wrote in the report dated May 25, 2026.

Weaker demand from key export destinations such as China, Japan, and South Korea weighed on Indonesia’s exports, particularly commodities such as coal and minerals. Non-oil and gas exports grew only 1.2% year-on-year, while imports surged 11.5% year-on-year due to stronger demand for capital goods and raw materials.

At the same time, Indonesia’s capital and financial account swung into a USD 4.9 billion deficit from a USD 9.0 billion surplus in the previous quarter, reflecting a reversal in portfolio flows amid rising global risk aversion.

Looking ahead, Mirae Asset expects pressure on Indonesia’s external balance to persist due to high global energy prices, uncertainty surrounding the U.S. Federal Reserve’s policy direction, and China’s slowing economy.

Indonesia’s current account deficit for full-year 2026 is projected to range between 0.5% and 1.3% of GDP, with risks leaning toward the upper end should commodity exports weaken further and foreign capital inflows remain volatile.

The second quarter may also bring additional pressure due to seasonal dividend repatriation and rising foreign exchange demand during the Hajj season, which could continue weighing on the rupiah.

Despite these challenges, Indonesia’s foreign exchange reserves remained relatively solid at USD 148.2 billion as of March 2026, providing some buffer against ongoing global uncertainty.