IHSG in the Red: Middle East Geopolitics and US Tariffs Pressure Global Markets

JAKARTA, KOMPAS.com - The Composite Stock Price Index (IHSG) moved into the red zone at the close of the first trading session on Friday (8/5/2024). The index corrected by 5.853 points or 0.08 percent to the level of 7,168.468.

The IHSG opened at 7,182.961 and touched the daily high at 7,186.830.

However, selling pressure caused the index to plunge to the low of 7,116.770 before trimming the weakness and moving consolidatively in the range of 7,160 to 7,170.

Trading frequency was recorded at 1,424,551 transactions.

In terms of stock movements, 245 stocks strengthened, 398 stocks weakened, and 168 stocks remained stagnant.

Associate Director of Research and Investment at Pilarmas Investindo Sekuritas, Maximilianus Nico Demus, said there were several factors driving the IHSG’s decline, particularly the renewed escalation of geopolitical tensions in the Middle East.

“How could it not? The United States announced that they fired on Iran after Iran attacked one of the US Navy ships yesterday. Iran’s attack on three American ships involved missiles, drones, and small boats,” Nico said on Friday.

“Of course, the United States happily retaliated by targeting all parties fully responsible for the attack,” he explained.

The US military stated it has no intention of escalating the conflict but remains ready to protect its troops.

“This, of course, has caused geopolitical tensions to resurface. Concerns that many parties may not be able to restrain themselves have put pressure on the situation, making it unlikely that the war will end easily,” he added.

Besides geopolitical factors, the market is also monitoring the latest dynamics related to Iran’s nuclear negotiations.

Nico mentioned that several points previously raised in the peace proposal were rejected by Iran.