Anticipated Dip in Indonesia's Stock Market Levels
The Indonesia stock market continued its upward trend on Tuesday, with the Jakarta Composite Index (JCI) adding 43.32 points or 0.61 percent, closing above the 7,140-point mark. This seven-day winning streak comes as the central bank in Indonesia, Bank Indonesia (BI), announced its decision to lower interest rates.
The benchmark lending rate, deposit facility rate, and lending facility rate in Indonesia are now 5.25 percent, 4.5 percent, and 6.0 percent respectively, following a 25 basis points reduction announced at BI's July 2025 monetary policy meeting. This decision reflects BI's assessment that inflation for 2025 and 2026 is expected to remain within the central bank's target range of 2.5% ±1%.
Bank Rakyat Indonesia was one of the notable gainers on the JCI, rallying 2.65 percent, while Semen Indonesia fell 0.36 percent. Indocement lost 0.45 percent, Indosat Ooredoo Hutchison shed 0.49 percent, and Indofood Sukses Makmur dipped 0.30 percent. However, Energi Mega Persada surged 3.80 percent.
Elsewhere, the Philadelphia Housing Sector Index plunged by 3.3 percent, while the Philadelphia Oil Service Index decreased by 3.1 percent. West Texas Intermediate crude for August delivery closed down by $0.46 at $66.52 per barrel.
In other news, technology giant Nvidia (NVDA) surged by 4.0 percent to a record closing high, as it prepares to resume H20 AI chip sales to China.
BI Governor Perry Warjiyo emphasized that the interest rate cut aims to support economic growth, with the central bank signaling it will continue to assess the potential for further rate cuts as conditions allow, while maintaining rupiah stability and keeping inflation on target.
The decision reflects a cautious, data-dependent approach to future policy moves, balancing the goals of supporting growth and maintaining macroeconomic stability. As the week progresses, investors will be keeping a close eye on the performance of individual companies in the JCI and any further developments from BI.
In light of Bank Indonesia's (BI) interest rate cut, the ongoing upward trend in the Indonesia stock market could be a sign for increased investing in the business sector, particularly finance, given the lower lending rates. As the central bank continues to assess the potential for further rate cuts, the movement of key industry players like Bank Rakyat Indonesia and others on the Jakarta Composite Index (JCI) will be closely monitored by investors.
