Indonesian Stocks Gain, but Rupiah Stability Key for Week's Performance

Indonesia's stock market showed a positive start to the week, with the Jakarta Composite Index (JCI) closing up 1.11 percent at 6,195.4 on Tuesday, June 2, 2026. This gain comes after a previous week that saw the index close lower.

Analysts suggest that the stability of the Indonesian rupiah will be the key factor influencing the JCI's movement throughout the current week. The rupiah has weakened by 6.6 percent year-to-date, contributing to foreign investors' outflow of Rp19.4 trillion from the regular market in May.

David Kurniawan, an Equity Analyst at PT Indo Premier Sekuritas, stated that investor attention is shifting towards the Indonesian authorities' efforts to stabilize the rupiah and restore foreign investor confidence. While Bank Indonesia has raised its interest rate to 5.25 percent to counter external pressures, the market will closely monitor the effectiveness of this policy in curbing rupiah volatility and stemming capital outflows.

"If the rupiah can show stabilization in the coming weeks, market sentiment is likely to improve and open the way for the return of foreign funds to the stock and domestic bond markets," Kurniawan said. He also noted that the direction of US monetary policy, particularly the Federal Open Market Committee (FOMC) meeting in mid-June, will be a significant concern for market players. Indications of easing US inflation could boost risky assets like the Indonesian stock market, while a hawkish stance from the US Federal Reserve might maintain the dollar's strength and limit capital flow to emerging markets.

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If the rupiah can show stabilization in the coming weeks, market sentiment is likely to improve and open the way for the return of foreign funds to the stock and domestic bond markets.