IHSG Predicted Volatile This Week Driven by Rising Geopolitical Risk

The Equity Analyst at PT Indo Premier Sekuritas (IPOT), Imam Gunadi, projects the Indonesian Composite Index (IHSG) to move volatilely with consolidation tendencies this week due to heightened geopolitical risk at the global level.

“The IHSG this week has the potential to move volatilely with consolidation tendencies, with support at 8,031 and resistance at 8,437,” said Imam in an official statement in Jakarta on Monday.

Imam stated that escalating conflict between Iran with Israel and the United States (US), as well as tensions in the South Asia region, are increasing global risk premiums, particularly as the situation around the Strait of Hormuz—a vital global energy distribution route—continues to develop.

“This uncertainty has the potential to drive US dollar strengthening and rising energy commodity prices, which typically trigger a rotation of funds to safe haven assets and constrain capital flows to emerging markets, including Indonesia,” said Imam.

However, for the IHSG, Imam stated that rising oil and coal prices could actually support the energy and mining sectors, particularly if commodity prices remain elevated.

According to him, Indonesia as an exporter of coal and numerous energy commodities has the potential to benefit from increases in average selling prices (ASP) and potential margin improvements for related sector issuers.

“In conditions of global uncertainty, commodity-based shares often become a hedge proxy against geopolitical risk and global inflation,” said Imam.

On the other hand, should the escalation of conflict cause excessively sharp and prolonged energy price spikes, he noted that risks of global inflation and pressure on the Rupiah exchange rate could increase.

He continued that significant oil price increases have the potential to increase pressure on the current account balance through higher fuel import values, whilst simultaneously increasing Rupiah volatility.

“If the rupiah weakens and global bond yields rise, then IHSG volatility could increase because foreign investors tend to reduce exposure to risky assets,” said Imam.

Therefore, in the short term, he concluded that the direction of IHSG movement is highly dependent on whether energy price increases are controlled and supportive for commodity issuers, or instead become an inflation shock that pressures macroeconomic stability.

Imam explained that heightened tensions in the Middle East, coupled with changing US trade policies, combined with credit rating agencies warning of increasing fiscal pressures in Indonesia, creates conditions of caution in both global and domestic financial markets.

The consequences of Middle Eastern escalation are felt globally through developments at the strategically important Strait of Hormuz, a critical transit route for approximately 20–25 per cent of global crude oil and LNG supply daily.

Closure or disruption of the Strait of Hormuz has the potential to shake the global energy market, as this route typically facilitates crude oil and gas trade reaching tens of millions of barrels daily, and could impact oil price conditions, energy supply chains, and shipping insurance costs which could spike sharply.

Amid mounting global uncertainty, US economic policy underwent significant changes last week.

The US Supreme Court struck down most of the global import tariffs previously imposed by the Trump administration, deemed to exceed legal authority, forcing the US administration to seek new legal grounds to maintain certain tariff policies.

Trump subsequently announced plans to increase global import tariffs to 15 per cent in response to the cancellation.

Meanwhile, the US Department of Commerce imposed anti-subsidy duties on solar panels from several countries, including Indonesia, with tariff rates ranging between 86 per cent and 143.3 per cent, deeming them to have received subsidies harmful to US domestic industry.

“These high tariff provisions could constrain Indonesian renewable energy sector exports to the US market and add pressure on the trade balance of related sectors,” said Imam.

Domestically, credit rating agency S&P Global Ratings warned that Indonesia’s fiscal pressure continues to rise, with the ratio of debt interest payments to state revenue estimated to have reached or potentially remain above the 15 per cent level, a threshold representing an important benchmark in assessing a country’s fiscal health.

Should this ratio remain elevated in the medium term, potential credit rating downgrades could occur even though the current outlook remains stable.

“This warning adds to investor and policymaker caution in addressing global turbulence whilst managing domestic fiscal challenges,” said Imam.

As early March 2026 approaches, several important data releases are expected, including Indonesia’s Manufacturing PMI for February 2026, Indonesia’s Trade Balance for January 2026, Indonesia’s Inflation for February 2026, and the US ISM Manufacturing Sector PMI for February 2026.

Additionally expected are the US ISM Services Sector PMI for February 2026, China’s NBS PMI for February 2026, US Initial Jobless Claims for February 28, Indonesia’s Foreign Exchange Reserves, US Non-farm Payrolls and US Unemployment Rate.