The Indonesia Composite Index surged above the key 9,000 level on Thursday, marking a historic milestone for Southeast Asia’s largest stock market. The benchmark broke through the psychological barrier during intraday trade and reached 9,001.84 by 10:02 a.m. Jakarta time. The jump signaled a dramatic turnaround from April 2025, when the index fell to the 5,800 range amid global panic over rising geopolitical tensions and trade protectionism.
A total of 363 stocks advanced, 301 declined, and 294 traded flat as turnover hit Rp 9.71 trillion. Market capitalization also climbed to Rp 16,434 trillion, supported by heavy trading in resource-linked names such as Bumi Resources and Alamtri Resources Indonesia.
Indonesia Composite Index Surpasses Key Psychological Level
Crossing the 9,000 level proved significant because investors had treated it as both a psychological threshold and a technical ceiling. Gains concentrated in commodity and industrial counters, with notable volume spikes in mining-related stocks. Analysts pointed out that the pace of recovery surprised many participants. The index had already touched 8,000 on August 15, 2025, during President Prabowo Subianto’s annual address, and then climbed another 12.5% in only 146 days.
The recovery reflected improving domestic confidence and rising participation from retail traders. Local traders continued to account for roughly half of total daily transactions, keeping liquidity vibrant even when foreign investors briefly retreated earlier in the year.
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Foreign Inflows and Retail Buying Drive Rally
Foreign inflows have returned strongly since late 2025, helping fuel the latest rally. Market participants cited attractive valuations and solid corporate earnings expectations relative to other emerging markets. Demand broadened across multiple sectors rather than concentrating in a few large-cap stocks, giving the rally stronger legs.
Analysts also linked the recovery to easing global financial conditions. The market widely expects the U.S. Federal Reserve to begin cutting interest rates this year. Traders believe lower rates will release fresh capital into emerging markets, including Indonesia, despite ongoing geopolitical risks.
The United States also influenced market sentiment through political developments. Defense-sector stocks in New York retreated overnight after President Donald Trump stated that he “would not allow” major U.S. defense contractors to issue dividends or buybacks until they addressed concerns such as executive pay and production issues. Crude prices weakened as Trump signaled that Venezuela’s interim authorities would ship as much as 50 million barrels of crude oil to the United States, raising fears of a short-term supply glut.
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Government Policy and Growth Outlook Lend Support
Domestic policy shifts played an equally important role in boosting sentiment. Investors pointed to the so‑called “Purbaya Effect,” referencing a series of pro‑growth fiscal adjustments overseen by Finance Minister Purbaya Yudhi Sadewa. Measures such as tighter supervision of natural resource export proceeds and revised export duties for gold and coal helped strengthen foreign exchange reserves without undermining industrial competitiveness.
The government’s decision to cancel planned excise hikes on cigarettes also supported consumer demand by protecting middle‑ and lower‑income purchasing power. As a result, retail‑linked issuers enjoyed steadier revenue growth during a period of global uncertainty.
Investors are now watching the release of the 2025 state budget realization data. The finance ministry will hold a press conference on Thursday afternoon to present full‑year figures for revenue, expenditure, and deficit. Market participants want clarity on tax shortfalls, subsidy spending, and debt financing. The deficit stood at Rp 560.3 trillion as of November 2025, or roughly 2% of GDP, close to the 2.48% target.
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IDX Growth Outlook Remains Positive Despite Risks
Strategists remain optimistic that the index could attempt the 10,000 level if macro conditions stay favorable. As reported by CNBC Indonesia, Maximilianus Nico Demus of Pilarmas Investindo Sekuritas remarked that “this gives a greater opportunity for the index to be able to touch 10,000,” and noted that investors continue to focus on economic acceleration, flagship programs, and the potential for rate cuts from both Bank Indonesia and the Federal Reserve.
However, geopolitical tensions involving China and Taiwan could still interrupt the rally. Analysts warned that any correction should avoid falling below 8,775 to maintain the bullish outlook.
Record Levels Highlight Market Confidence
The rally above 9,000 capped one of the fastest recoveries in the index’s history and underscored growing confidence in Indonesian equities. A combination of domestic reforms, foreign inflows, and resilient consumer demand has helped transform last year’s market shock into a broad‑based recovery. Investors now look ahead to the budget data release and global rate decisions to determine whether the momentum can extend deeper into 2026.
Source: cnbcindonesia.com
Image: Getty Images
