IHSG Set for Volatility as US-Iran Tensions Trigger Investor Risk-Off Sentiment
The Indonesia Stock Exchange (IDX) Composite Index (IHSG) is expected to experience volatile trading on Tuesday, driven by a risk-off attitude among investors due to heightened tensions between the United States and Iran. The IHSG opened up 19.92 points, or 0.33 percent, at 6,057.76. Meanwhile, the LQ45 index of 45 leading stocks rose 0.74 points, or 0.12 percent, to 603.11.
“Based on technical analysis, we see the IHSG potentially weakening in a limited manner with support and resistance at 6,000 and 6,220,” said Maximilianus Nico, Associate Director of Pilarmas Investindo Sekuritas, in a research note in Jakarta on Tuesday.
From the global front, US President Donald Trump stated that the US would act as a guardian of the Strait of Hormuz. The US will begin blocking ships from entering and leaving Iranian ports and coastal areas starting 14 July 2026 at 16:00 New York time. Trump also said he would attack Iran very hard on Tuesday and Wednesday this week, adding to the uncertainty between the US and Iran and fuelling expectations that peace negotiations are increasingly distant from reality. Although all Iranian ships will be blocked from entering and leaving, Trump conveyed that ships from other countries may still cross, but the US will impose a 20 percent tariff on all cargo shipped.
“This sentiment has caused oil prices to rise again, which in turn increases the probability of an interest rate hike by the US central bank, The Fed, this year,” Nico stated.
Domestically, S&P Global Ratings has maintained Indonesia’s sovereign credit rating with a stable outlook. S&P also projects Indonesia’s economy will grow by 5.1 percent in 2026, before recording an average growth of 4.9 percent per year throughout 2026–2029. This outlook is supported by fiscal spending, downstreaming programmes, and improved management of the natural resources sector. S&P also estimates that the Indonesian government will maintain the state budget deficit limit of three percent of gross domestic product (GDP) as the main fiscal policy anchor.
Nico noted that for the financial market, S&P’s positive assessment could serve as a catalyst for sentiment towards the Indonesian bond and stock markets, particularly in domestically oriented sectors such as banking, consumer goods, and infrastructure. “However, this positive impact is likely to still be influenced by the direction of Bank Indonesia’s interest rate policy and global economic developments, so the room for market strengthening remains dependent on macroeconomic stability and foreign capital flows,” Nico said.
During Monday’s (13/07) trading, European bourses moved variably, with the Euro Stoxx 50 weakening 0.01 percent, the UK’s FTSE 100 strengthening 0.01 percent, Germany’s DAX index strengthening 0.19 percent, and France’s CAC 40 index strengthening 0.31 percent. Meanwhile, Wall Street markets weakened on Monday, with the S&P 500 index falling 0.79 percent to 7,515.34, the Nasdaq Composite falling 1.88 percent to 29,264.00, and the Dow Jones Industrial Average falling 0.26 percent to 52,498.64. Regional Asian stock markets this morning saw the Nikkei index strengthen 0.09 percent to 67,300.00, the Shanghai index weaken 0.16 percent to 3,907.95, the Hang Seng index weaken 1.06 percent to 23,958.00, and the Straits Times index weaken 0.93 percent to 5,419.29.