FX.co ★ Indonesian Equities Hit Five-Week High as BI Holds Rates, Fiscal Cuts Loom

Indonesian stocks jumped 73 points, or 1.2%, to 6,405 in early Thursday trading, reaching a five-week high after a modest decline in the previous session. Sentiment improved after Bank Indonesia left its benchmark rate unchanged at 5.75%, pausing following a total of 100 bps of hikes since May, while also announcing new incentives aimed at drawing foreign capital inflows. On the fiscal front, the government cut the budget for its free school meals program to IDR 229 trillion from IDR 268 trillion, and Finance Minister Purbaya Yudhi signaled that defense spending may also be reduced to prioritize poverty alleviation. Gains were limited, however, by weaker U.S. futures and rising oil prices, after President Trump threatened strikes on Iranian infrastructure in response to possible shipping attacks in the Strait of Hormuz. Even so, all major sectors advanced, led by technology, energy, basic materials, and non-cyclical stocks. Notable gainers included Darma Henwa (8.6%), Petrosea (6.4%), Erajaya Swasembada (5.0%), and Raharja Energi Cepu (4.9%).