TEMPO.CO, Jakarta - The Jakarta Composite Index (JCI) on the Indonesia Stock Exchange (IDX) strengthened on Thursday morning as investors continued to monitor the direction of global benchmark interest rate policies.
The JCI opened up 14.72 points, or 0.26 percent, to 5,709.84. Meanwhile, the LQ45 index, or 45 blue chips, rose 2.57 points, or 0.46 percent, to 559.32.
"Based on technical analysis, we see the JCI has limited potential for strengthening, with support and resistance levels of 5,320-5,735. A correction is still possible, so please remain cautious," said Maximilianus Nico Demus, Associate Director of Research and Investment at Pilarmas Investindo Sekuritas, in a statement in Jakarta on Thursday.
From abroad, at a meeting at the European Central Bank (ECB) banking forum, Fed Chairman Kevin Warsh stated that inflation risks have eased for the coming weeks, with the inflation target remaining at 2 percent.
Warsh stated that inflation expectations have declined over the first four weeks, aligning with the Fed's focus on maintaining inflation stability.
As the Fed refrained from raising interest rates, bond yields have stalled and are trending downward. The Fed views the previous year's increase in inflation as temporary.
"Because currently, energy and gasoline prices continue to decline, due to the good news regarding the United States (US)-Iran agreement," Nico said.
Furthermore, Warsh emphasized that the Fed remains independent, even though US President Donald Trump has consistently called for a rate cut. Warsh said the Fed will have a new direction, but he would not reveal it.
"The latest projections for interest rates show that 18 officials project a rate hike this year," Nico said.
Domestically, the Central Statistics Agency (BPS) reported that monthly inflation in June 2026 reached 0.44 percent month-to-month (mtm), calendar-year inflation of 1.79 percent year-to-date (ytd), and annual inflation of 3.34 percent year-on-year (yoy). The increase in inflation was due to seasonal cycles, rising raw material prices, and rising fuel prices.
Furthermore, BPS reported that Indonesia's trade balance recorded a deficit of US$1.61 billion in May 2026, the first deficit in six years, due to imports reaching US$24.81 billion, exceeding exports of US$23.20 billion.
"Pressure on Indonesia's external sector is starting to increase, primarily due to slowing exports amid weakening global demand and falling prices for several leading commodities," said Nico.
On the other hand, the increase in imports reflects the continued strong domestic demand for raw materials, capital goods, and energy. If the increase in imports is dominated by raw materials and capital goods, this condition can still be viewed positively as it supports production and investment activities.
Nico stated that if the weakening export trend continues in the coming months, the trade surplus, which has been a pillar of rupiah exchange rate stability and foreign exchange reserves, could potentially shrink.
"However, because cumulatively from January to May 2026, the trade balance still recorded a surplus, the impact on Indonesia's economic fundamentals is expected to be limited," Nico said.
On Wednesday, June 1, European stock markets moved mixedly, with the Euro Stoxx 50 weakening 0.70 percent, the UK's FTSE 100 index weakening 0.18 percent, the German DAX index strengthening 0.18 percent, and the French CAC 40 index weakening 0.79 percent.
US stock markets on Wall Street also traded mixed on Wednesday, June 1, with the Dow Jones Industrial Average weakening 0.03 percent, the S&P 500 weakening 0.2 percent, and the Nasdaq Composite weakening 1.54 percent.
Asian regional stock markets this morning included the Nikkei index, which rose 1.55 percent to 19,733.00, the Shanghai Composite Index, which fell 0.83 percent to 4,078.00, the Hang Seng Index, which fell 1.15 percent to 23,143.00, and the Straits Times Index, which gained 0.49 percent to 5,186.00.
Read: Do Prabowo's Speeches Really Affect the Stock Market? OJK Responds
Click here to get the latest news updates from Tempo on Google News
