Indonesian Stocks Rise as Fed Bets and MBG Savings Lift Sentiment

Indonesian Stocks Rise as Fed Bets and MBG Savings Lift Sentiment

Jakarta. Indonesian stocks opened higher on Friday, tracking broad gains across Wall Street and Asian markets as improving expectations for US monetary policy lifted risk appetite.

Jakarta Composite Index (JCI) rose to 6,695, adding 28 points or 0.41% in early trading, moving between 6,685 and 6,704.

More than 4.5 billion shares changed hands, with turnover reaching Rp 1.87 trillion ($106.05 million) across more than 279,000 transactions. A total of 326 stocks gained, while 175 declined and 220 were unchanged.

Phintraco Sekuritas said domestic sentiment was supported by the government’s plan to review spending for the Free Nutritious Meals (MBG) program. Finance Minister Purbaya Yudhi Sadewa said the Rp 240 trillion budget proposed for the program in 2027 could be reduced to below Rp 200 trillion through greater efficiency and the use of technology.

National Nutrition Agency (BGN) has also expressed openness to reducing the program’s budget and will recalculate its 2027 funding needs by taking into account improvements in beneficiary data and the program’s implementation on the ground.

“If the MBG program budget can be reduced, the funds are expected to be redirected to other programs that can support economic growth and help reduce the budget deficit,” Phintraco Sekuritas said.

Kiwoom Sekuritas Indonesia added that the government was also considering reviewing the Rp 500 million annual turnover threshold that currently qualifies micro, small and medium enterprises (MSMEs) for income tax exemptions.

Purbaya considers the threshold relatively low and has said it could be adjusted according to economic conditions.

“With more room to grow before entering full tax obligations, this policy is expected to encourage business expansion, boost economic activity, and strengthen MSMEs’ contribution to the national economy,” Kiwoom said.

Global sentiment also improved as investors regained confidence that a US Federal Reserve rate hike at its September meeting was not yet a certainty. Remarks by Federal Reserve Governor Christopher Waller pushed rate-hike expectations down toward 50%, easing pressure on equity markets.

“Investor focus now turns to the US nonfarm payrolls report for August, which will be an important indicator for assessing labor market resilience,” Kiwoom said.

The next combination of US employment and inflation data will be a key catalyst for monetary policy expectations and global market movements in the short term.

Meanwhile, Phintraco said investors were also watching an upcoming OPEC+ meeting to discuss oil production levels for October. The oil-producing alliance previously raised its production quota by 188,000 barrels per day, effective September 2026.

Russia has said the alliance does not plan to cut output amid a recovery in global demand.

“If OPEC+ raises production again, it is expected to help contain further increases in oil prices,” Phintraco said.

Wall Street closed sharply higher on Thursday, led by technology and software stocks after several volatile sessions. The Dow Jones Industrial Average gained 1.18%, while the S&P 500 rose 1.06% and the Nasdaq Composite jumped 1.40%.

The rally in technology stocks was led by Snowflake, which surged more than 16% after raising its product revenue forecast. Nvidia also gained after confirming plans to acquire open-source AI platform Hugging Face in a deal worth nearly $13 billion.

Pluang Research said the acquisition marked Nvidia’s most ambitious move yet to expand its influence across the AI supply chain, spanning chips, models, datasets and developer workflows.

Unlike Nvidia’s previous failed attempt to acquire Arm, which was blocked by regulators, Nvidia has committed to keeping the platform open to all vendors, a move seen as an effort to ease antitrust concerns.

“However, the concentration of power in the AI industry remains under scrutiny, as Nvidia is already the largest player and is gaining deeper control over the infrastructure supporting the open-source ecosystem,” Pluang Research said in its Friday report.

Asian markets also opened higher as of 9:16 a.m. Jakarta time. Japan’s Nikkei gained 0.64%, South Korea’s Kospi jumped 1.04%, Hong Kong’s Hang Seng surged 2.13%, and Shanghai’s SSE rose 0.89%.

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