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ndonesian share prices closed higher on Friday, with the main index breaking the psychological barrier of 4,000 for the first time ever amid improved investor confidence in the global market.

The Jakarta Composite Index, the main price indicator at the Indonesian Stock Exchange (IDX), surged 1.63 percent to a record close of 4,003.69 as confident investors pumped more funds into the local stock market.

Securities analyst said improved economic fundamentals in Indonesia also encouraged investors to increase their portfolio on local blue chips. They predicted bullish market conditions would likely last for the next few months.

“Historically, markets are more bullish in the third and fourth quarters.,” MNC Securities head of research Edwin Sebayang told The Jakarta Post, adding that the latest achievement was “overdue”.

Like other analysts, he also predicted the index would close the year at 4,500.

Foreign investors bought more than Rp 600 billion (US$70.8 million) more in shares than they sold on Friday, pushing up prices of blue chip stocks. Foreigners pumped in more than Rp 3 trillion this week.

“Foreign investors are more comfortable about entering Indonesia,” Edwin said. The nation’s stock market saw massive sell-offs in January as investors expressed concern over surging inflationary pressure, triggering a bearish market.

The headline inflation rate, however, settled at 5.54 percent in June after peaking to a 21-month high of 7.02 percent in January.

The country is also poised for at least 6.5 percent growth this year amid a slowdown in developed countries, a positive signal for businesses as economic activities are expected to increase compared with the 6.1 percent economic growth last year — increasing investor confidence in stocks in Southeast Asia’s largest economy.

Bank Mandiri (BMRI), the country’s largest lender by assets and one of the IDX’s top five companies by market capitalization, saw its share price rise to a record Rp 7,600 on Friday, a 3.4 percent increase. Astra International (ASII), the largest firm on the exchange by market cap, climbed 3 percent to Rp 67,800 per share.

The index has increased 8.1 percent so far this year — the second-best performer in Asia — as overseas investors bought a net Rp 18.7 trillion in shares this year as of July 7, compared with Rp 8.16 trillion in the same period a year earlier, Bloomberg data showed.

Hinting at better prospects for the second half of the year due to the trend, Finance Minister Agus Martowardojo — whose ministry regulates and supervises the capital market — warned regulators and the market of being careful of stock price surges.

“I ask capital market supervisors to look at the portfolio to identify sectors that may have price-to-earnings or price-to-book [ratios] that may be too high, to ensure that all the numbers are supported by good fundamentals,” Agus said Friday.

Capital flows into the stock market on Friday helped push the rupiah to Rp 8,524 against the US dollar.

Emerging market stocks advanced, sending the benchmark index to a two-month high, as data from the US signaled the world’s biggest economy was improving, bolstering the outlook for global growth, Bloomberg reported.

The MSCI Emerging Markets Index added 0.3 percent to 1,171.31 as of 3:31 p.m. in Singapore, set for its highest level since May 3. The gauge has climbed 1.3 percent this week, set to cap a third weekly gain that would be its longest rally in three months.