Indonesian Stocks Advance as Wall Street Surge Offsets Budget Concerns

Jakarta. Indonesian stocks gained on Friday morning, tracking a broad rally across global equities after upbeat US tech earnings eased concerns over higher interest rates, despite lingering domestic uncertainty over future budget allocations following a Constitutional Court ruling on the government’s free nutritious meals program.

Jakarta Composite Index (JCI) rose 33 points, or 0.54%, to 6,219 by the morning session, moving within a range of 6,216 to 6,230.

Trading volume reached 1.14 billion shares with a turnover of Rp 450.12 billion ($24.91 million), across more than 70,184 transactions. Gainers outnumbered losers 333 to 110, while 205 stocks were unchanged.

Phintraco Sekuritas said the Constitutional Court had partially granted a judicial review of Law No. 17/2025 on the 2026 State Budget, which currently includes the government’s Free Nutritious Meals (MBG) program within the constitutionally mandated education budget worth 20% of state spending.

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The court ruled that starting no later than the 2028 fiscal year, spending on the MBG program that is not directly related to core education activities must be separated from the education operational budget.

Phintraco said the ruling could affect the allocation of other budget items if funding for the MBG program remains substantial in future budgets.

Separately, Kiwoom Sekuritas Indonesia said the government’s newly implemented subsidized mortgage policy, which extends loan tenors to as long as 40 years, is expected to improve housing affordability and provide fresh momentum for the property sector. Borrowers can now choose repayment periods ranging from 10 to 40 years based on their financial capacity.

Externally, Phintraco expects the rebound on Wall Street and lower oil prices to support sentiment on the Indonesia Stock Exchange. The brokerage added that recent US economic data had eased concerns that the Federal Reserve might need to raise interest rates more aggressively than previously expected. The ongoing second-quarter earnings season and a wave of corporate actions were also seen as positive catalysts.

Kiwoom said investor attention has shifted to earnings reports from Amazon and Apple as the next major drivers for technology stocks.

On the macroeconomic front, US core personal consumption expenditures (PCE) inflation rose just 0.1% month-on-month in June, below the 0.2% consensus forecast, reinforcing expectations that inflationary pressures are easing. However, US economic growth remained sluggish, with second-quarter GDP expanding 1.5%, below market expectations of 2.1%, keeping concerns over the economic outlook alive.

Wall Street closed sharply higher overnight after Microsoft reported stronger-than-expected earnings while maintaining its 2026 capital expenditure guidance, reviving optimism over artificial intelligence investment. The S&P 500 advanced 1.7%, the Nasdaq Composite jumped 2.8% — its biggest daily gain since June 15 — and the Dow Jones Industrial Average climbed 1.2%.

Across Asia, markets traded mostly higher as of 9:26 a.m. Jakarta time. Japan’s Nikkei climbed 4.72%, South Korea’s Kospi surged 13.55%, and China’s Shanghai Composite gained 0.82%, while Hong Kong’s Hang Seng slipped 0.51%.

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