IHSG strengthens as domestic stability risks ease

The Jakarta Composite Index (IHSG) of the Indonesia Stock Exchange (BEI) moved higher on Friday morning, buoyed by easing domestic security and political stability risks. The IHSG opened up 13.97 points, or 0.21 percent, at 6,535.72. Meanwhile, the LQ45 index of 45 blue-chip stocks rose 1.99 points, or 0.31 percent, to 643.06.

“The IHSG is expected to move sideways in the range of 6,450-6,580, ahead of the weekend and the Federal Reserve chairman’s speech at the Jackson Hole symposium,” said Phintraco Sekuritas Head of Research Ratna Lim in her research note in Jakarta on Friday.

Domestically, the reduced political and security risks were responded to positively by market participants, after the market had tended to be pressured in recent days in anticipation of domestic security and political conditions. The House of Representatives (DPR RI) is targeting the ratification of the Asset Forfeiture Bill into law by 15 December 2026 at the latest.

On another front, Commission XI of the DPR RI approved Destry Damayanti as the elected Governor of Bank Indonesia (BI) for the 2026-2031 period. Through this approval, Destry Damayanti definitively replaces Perry Warjiyo, who resigned from the position of BI Governor on 25 July 2026. Meanwhile, the position of Senior Deputy Governor shifts to Aida S. Budiman.

“This is expected to reduce uncertainty regarding BI’s future monetary policy as well as maintain stability and investor confidence in the Indonesian capital market,” said Ratna.

Meanwhile, Danantara Indonesia allocated US$1 billion to Swiss asset management firm Partners Group for investment in the private credit sector. Danantara placed US$600 million with Partners Group for investment in direct lending opportunities. The remaining US$400 million was allocated as a discretionary tranche, to be managed by Partners Group and used for co-investment needs.

Overseas, Wall Street posted gains driven by Nvidia’s quarterly performance, which reignited investor enthusiasm for the artificial intelligence (AI) sector. Nvidia, the world’s largest company by market capitalisation, recorded quarterly revenue that more than doubled compared to the previous year, driven by rising demand for hardware amid massive AI infrastructure development.

“This reminds investors that the AI and technology sectors remain the main drivers of Wall Street’s gains,” said Ratna.

Meanwhile, global crude oil prices were observed strengthening after the US confirmed it was not in talks with Iran, despite diplomatic efforts by other countries. This dimmed hopes for the restoration of oil flows through the Middle East, as Iran had previously stated it would open the Strait of Hormuz if the US agreed to Iran’s conditions.

“Uncertainty in the Middle East has the potential to keep oil prices at high levels for longer than previously expected,” said Ratna.

Meanwhile, US Treasury yields were little changed ahead of the start of the Fed’s annual economic symposium in Jackson Hole. “Investors are awaiting Fed Chairman Kevin Warsh’s speech at Jackson Hole for clues on the inflation outlook and the direction of the central bank’s monetary policy,” said Ratna.

European markets were mixed on Thursday (27/05), with the Euro Stoxx 50 down 0.73 percent, the UK’s FTSE 100 down 0.79 percent, Germany’s DAX up 0.31 percent, and France’s CAC 40 down 1.68 percent. Meanwhile, US markets on Wall Street closed higher on Thursday (27/05), with the S&P 500 up 0.72 percent to 7,730.99, the Nasdaq up 1.57 percent to 26,541.35, and the Dow Jones up 0.20 percent to 53,569.44.

Asian regional stock markets this morning included the Nikkei up 0.75 percent to 66,623.00, the Shanghai index up 0.16 percent to 3,962.12, the Hang Seng up 0.21 percent to 25,630.50, and the Straits Times up 0.02 percent to 5,685.33.