IHSG Predicted to Weaken Amid Spike in Global Oil Prices
Jakarta (ANTARA) – Maximilianus Nico Demus, Associate Director of Research and Investment at Pilarmas Investindo Sekuritas, projects the Indonesia Stock Exchange Index (IHSG) will weaken during trading on Monday, 9 March, citing escalating global crude oil prices as a primary driver. Oil prices have surged above $100 per barrel in international markets.
“Based on technical analysis, we see the IHSG potentially experiencing limited weakness with support and resistance levels at 7,460–7,860,” said Nico in his assessment released in Jakarta on Monday.
Geopolitical tension in the Middle East is fuelling the oil price surge. According to reports, US and Israeli forces have targeted military facilities and Iranian energy infrastructure, including oil storage depots and related installations near Tehran and in Alborz province, triggering major fires. In retaliation, Iran has launched ballistic missiles and drone attacks against Israel and targeted US military assets, including bases across several Middle Eastern countries.
The ongoing conflict is heightening concerns about potential disruptions to global oil trade, given that the Middle East and the Strait of Hormuz represent critical conduits for worldwide energy distribution.
At 07:50 Western Indonesia Time this morning, global oil prices had reached WTI crude oil at $109.82 per barrel and Brent oil at $109.53 per barrel.
“We assess that escalating attacks on Iranian energy facilities could drive further increases in global oil prices by raising supply disruption risks, particularly if the conflict affects shipping lanes through the Strait of Hormuz, which channels approximately one-fifth of global oil trade,” Nico explained.
Domestically, the Indonesian government is considering budget adjustments to the Free Nutritious Meal Programme (MBG) or increases to subsidised fuel prices should surging global oil prices strain the 2026 state budget. Without policy adjustments, the budget deficit could widen to 3.6 per cent of gross domestic product.
Spending efficiency measures and delays to infrastructure projects could help maintain fiscal discipline and prevent further budget deficit expansion. However, such steps risk slowing infrastructure development and economic activity in the construction sector.
“Should the government ultimately increase subsidised fuel prices, the consequences could trigger inflation, raise transportation and logistics costs, and suppress household purchasing power,” Nico said.
US stock markets declined sharply on Friday, 6 March, with the Dow Jones Industrial Average falling 0.95 per cent to 47,501.55, the S&P 500 weakening 1.33 per cent to 6,740.02, and the Nasdaq Composite dropping 1.59 per cent to 22,387.68.
The IHSG closed Friday, 6 March, down 124.85 points, or 1.62 per cent, at 7,585.68. The LQ45 index of 45 leading shares fell 11.77 points, or 1.49 per cent, to 776.04.