(March 26): Indonesian equities rallied 4% on Wednesday after a period of relentless selling on worries over the country's growth outlook and fiscal stability, though market participants cautioned the recovery might be short-lived.

Sharp gains in banks across Southeast Asia, particularly Bank Central Asia and Bank Rakyat Indonesia, propelled the MSCI index of Asean equities by 1% to its highest level in more than two weeks.

The two Indonesian banks account for roughly 6.7% of the index, while Indonesia's overall weight in the index is 15%.

Jakarta's benchmark index rose to its highest in more than a week, extending its recovery into a second session after hitting its lowest point since September 2021 earlier this week.

The rupiah, one of the worst-performing emerging market currencies globally, was last trading at 16,585 per US dollar after the central bank intervened on Tuesday to shore it up from a near 27-year low of 16,640.

A Bank Indonesia official did not confirm any intervention on Wednesday but said the central bank was ready to do so with the rupiah not far from its 1998 lows.

Investor confidence in Indonesia has faltered as President Prabowo Subianto's spending plans have stoked worries about the country's fiscal health, while the launch of a new sovereign fund has raised concerns over potential political interference.

"This rebound feels more like a valuation-led bounce in oversold names than a shift in fundamentals; a tactical rally, not a structural one (yet)," said Mohit Mirpuri, a fund manager at Singapore-based SGMC Capital.

"Some buying is also likely pre-positioning ahead of the long market break, with investors anticipating better sentiment in the second quarter as political noise fades and corporate actions like buybacks offer tactical support."

US President Donald Trump's trade policy ahead of the next round of tariffs on April 2 and its impact on trade-reliant Asian economies also has traders on the edge of their seats.

An MSCI gauge of equities in emerging Asia ticked higher, helped by a 1% jump in South Korean stocks. Stocks in Taiwan and the Philippines drifted lower.

Thailand's baht drifted lower after having briefly breached the 33.80-per-dollar level earlier in the day. Stocks jumped 0.5%.

Malaysia's ringgit appreciated 0.2% and stocks jumped 0.7% to a nine-day high.

Singapore stocks extended their winning streak into a third consecutive session and were on pace for a record-high closing level.

Uploaded by Magessan Varatharaja