TEMPO.CO, Jakarta - Indonesia’s benchmark stock index is expected to trade with heightened volatility on Wednesday as investors weigh the impact of soaring global oil prices and persistently high interest rates worldwide.
The Jakarta Composite Index (JCI) opened 11.67 points, or 0.19 percent, higher at 6,207.10. Meanwhile, the LQ45 index, which tracks 45 of the most liquid and largest-cap stocks on the Indonesia Stock Exchange (IDX), slipped 0.25 points, or 0.04 percent, to 619.02.
“Overall, the short-term outlook for the Indonesian market is improving, but it remains vulnerable to external pressures from elevated oil prices, persistently high global interest rates, and a weakening trade surplus,” Lotus Andalan Sekuritas Research Team said in a report released in Jakarta on Wednesday.
Global sentiment remained mixed despite strong gains in major markets. In the United States, stock indexes climbed to fresh record highs on June 2, driven by continued optimism surrounding artificial intelligence (AI) and the semiconductor industry.
The rally has reinforced investor confidence that the AI investment cycle still has significant room for growth. However, analysts noted that the market is increasingly exposed to concentration risks, with gains heavily driven by a small number of large-cap technology stocks.
At the same time, rising geopolitical tensions between the United States and Iran have renewed concerns over global energy supplies after Tehran threatened to block the Strait of Hormuz, one of the world’s most important oil shipping routes.
The tensions have pushed global crude prices closer to US$100 per barrel, raising fears of renewed inflationary pressures worldwide.
Adding to those concerns, robust U.S. labor market data and rising inflation in the eurozone have reduced expectations for interest-rate cuts by major central banks.
“The combination of high energy prices, persistent inflation, and elevated interest rates could reduce investor appetite for emerging-market assets, including Indonesia,” the research team said.
Domestically, Indonesia’s manufacturing Purchasing Managers’ Index (PMI) returned to expansion territory in May 2026, signaling a recovery in economic activity after contracting in the previous month.
However, several risks continue to weigh on market sentiment. Foreign investors recorded net sales of Rp1.39 trillion (US$78 million), indicating that confidence in Indonesia’s market has yet to fully recover.
Indonesia’s trade surplus also narrowed sharply to just US$90 million due to a surge in imports, while annual inflation accelerated to 3.08 percent in May, driven by higher transportation and energy costs.
In the banking sector, a high level of undisbursed loans suggests liquidity remains ample, although demand for productive lending has yet to fully rebound.
European markets closed broadly higher on Tuesday, with the Euro Stoxx 50 rising 1.17 percent, Britain’s FTSE 100 gaining 0.33 percent, Germany’s DAX advancing 0.48 percent, and France’s CAC 40 climbing 0.77 percent.
Wall Street also ended higher, with the Dow Jones Industrial Average gaining 0.45 percent, the S&P 500 rising 0.13 percent, and the Nasdaq Composite advancing 0.48 percent.
Across Asia, markets were mixed in early trading. Japan’s Nikkei surged 2.56 percent, while China’s Shanghai Composite gained 0.19 percent. Hong Kong’s Hang Seng fell 1.52 percent, while Singapore’s Straits Times Index rose 0.83 percent.
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