IHSG Poised for Limited Gains Amid US-Iran Tensions

Jakarta (ANTARA) - The Composite Stock Price Index (IHSG) of the Indonesia Stock Exchange (BEI) opened on Tuesday morning up 41.23 points or 0.60 percent to 6,946.85.

Associate Director of Research and Investment at Pilarmas Investindo Sekuritas, Maximilianus Nico Demus, assessed that current market movements are still overshadowed by global uncertainties, particularly the heating relations between the United States (US) and Iran.

Market hopes had briefly emerged following attempts at negotiations between the US and Iran.

However, that optimism faded again after the talks reached a deadlock.

“Even the United States is reconsidering next steps, including military action against Iran, which could potentially drive up oil prices again and shroud the market in renewed uncertainty,” Nico said in his analysis in Jakarta on Tuesday.

Amid these conditions, market participants are also awaiting the US-China meeting scheduled for 13-15 May 2026.

Nico views that meeting as a new hope for restoring relations between the two countries after prolonged tensions since US President Donald Trump took office.

In addition to geopolitical sentiment, investor attention this week is focused on several key economic data releases from the US, Europe, China, and Japan.

From the US, inflation data to be released is projected to rise from 3.3 percent to around 3.5-3.8 percent.

Meanwhile, core CPI inflation is also estimated to increase from 2.6 percent to 2.7-2.8 percent.

On the producer side, the annual Final Demand Producer Price Index (PPI) is projected to rise from 4 percent to 4.7-4.9 percent.

Nico stated that the rise in inflation from both consumer and producer sides could amplify pressure on Federal Reserve interest rate policy.

“The increase from the producer side will heighten overall inflation pressure, potentially leading the Fed to tighten its belt,” he said.

On the other hand, US employment data is seen as still showing relatively stable conditions despite a slowdown.

However, the US-Iran conflict is expected to pressure consumer spending, reflected in projections of monthly retail sales declining from 1.7 percent to around 0.5-0.8 percent.

Meanwhile, from China, the market is awaiting retail sales and industrial production data amid efforts to recover the Bamboo Curtain country’s economy.

Nico projects China’s retail sales to increase from 1.7 percent to 1.9-2 percent, while industrial production is estimated to rise from 5.7 percent to 5.9-6 percent.

According to him, China’s economic resilience will serve as an important buffer for the global economy, including Indonesia as one of China’s major trading partners.

“Moreover, China is beginning to forge cooperation with various new trading partners, where Africa and Europe are becoming major export destinations,” he said.

From Japan, first-quarter 2026 gross domestic product (GDP) data is also in focus.

Nico estimates Japan’s Annualized QoQ GDP to increase from 1.3 percent to around 1.5-1.7 percent.

He assesses that this condition indicates Japan’s economic resilience amid the ongoing yen weakening.

Furthermore, domestically, Nico believes there is still room for the stock and bond markets to strengthen, though the gains are expected to be limited.

Positive sentiment comes after Finance Minister Purbaya Yudhi Sadewa assured that the government will not yet activate the Bond Stabilization Fund (BSF) as the bond market conditions are deemed still under control.

The government is said to prefer maintaining debt market stability through state cash management and available fiscal instruments, including utilizing the excess budget balance (SAL).

Nico views this decision as indicating that pressure in the domestic bond market remains at a manageable level and has not significantly disrupted financial system stability.

“Stabilization measures using government cash can help maintain investor confidence in the bond market without creating perceptions of an emergency situation,” he said.

Nevertheless, he believes bond market volatility risks still need to be monitored, especially if there is a spike in yields due to global or domestic pressures.

Thus, Pilarmas Investindo Sekuritas projects the IHSG could see limited gains, with support at the 6,850 level and resistance at 7,000.