IHSG slips as 'risk-off' stance bets on higher global oil prices
Jakarta – The Jakarta Composite Index (IHSG) on the Indonesia Stock Exchange (BEI) opened lower on Wednesday morning, as investors adopted a risk-off mode ahead of higher global crude oil prices. The IHSG fell 43.39 points, or 0.55%, to 7,896.38, while the LQ45 index declined 3.29 points, or 0.41%, to 802.31. ‘Technically, the IHSG is one step away from the 7,900–7,840 support area. Brace your portfolios for a possible deeper breach (bearish flag). Volatility is expected to remain high over the next two weeks, and a wait-and-see stance is more advisable,’ said Liza Camelia Suryanata, Head of Research at Kiwoom Sekuritas Indonesia, in a Jakarta briefing on Wednesday.
She noted that global market sentiment was dominated by risk-off after the Middle East conflict entered its fourth day, with escalations between Iran, the United States and Israel. Iran’s attacks on energy facilities and tankers in the Gulf, and the threat to close the Hormuz Strait which accounts for roughly one-fifth of the world’s energy supply, raised concerns over global supply disruptions. Brent rose to around $81–82 a barrel, while US WTI climbed to around $74–75 a barrel, after previously surging as much as nearly 10% intraday and touching the highest level since 2024–2025.
‘The surge in oil prices heightens concerns about global inflation since energy is a key component of production and transport costs,’ Suryanata said. Moreover, investors are beginning to price in a longer-than-expected conflict, increasing energy inflation risk and potentially stifling global growth. ‘The oil price spike is viewed as an energy supply shock that could push global inflation higher and force central banks to maintain tight monetary policy for longer,’ she added.
As a result, market participants are no longer pricing in Fed rate cuts fully through September 2026. Fed Funds Futures imply around a 56% probability that the Fed will keep rates unchanged in June 2026. Meanwhile, the US dollar rose sharply as a safe-haven asset, reaching multi-month highs against the euro, the pound and the yen. In contrast, global gold prices fell as the dollar strengthened and investors took profits in this instrument.
Geopolitical tensions are beginning to disrupt global trade, particularly in energy and logistics. The Hormuz Strait threat could disrupt around 20% of global oil supplies and a large volume of LNG. Shipping disruptions are also pushing up freight rates and energy prices. Additionally, the conflict has led to the temporary closure of several major Middle East aviation hubs, such as Dubai, Doha and Abu Dhabi, with more than 21,300 flights cancelled and tens of thousands of passengers stranded.
From the domestic front, BEI, together with the Indonesia Central Securities Depository (KSEI), issued information on share ownership above 1% of listed companies, to be published monthly on BEI’s website (www.idx.co.id/id/berita/pengumuman/ or www.idx.co.id > Berita > Pengumuman), in order to provide investors with more accurate references for decision-making and to bolster market confidence, integrity and credibility.
On Tuesday (3/3), European stock markets broadly fell, with Euro Stoxx 50 down 3.64%, UK FTSE 100 down 2.75%, DAX down 3.44% and CAC 40 down 3.46%. US stock markets also fell: Dow Jones Industrial Average down 0.83% to 48,501.27, S&P 500 down 0.95% to 6,816.63 and Nasdaq Composite down 1.09% to 24,720.08. Regional Asia-Pacific markets opened lower this morning, with Nikkei down 1,653.80 points (2.94%) to 54,625.30, Shanghai down 29.50 (0.73%) to 4,094.17, Hang Seng down 433.34 points (1.68%) to 25,334.74, Kuala Lumpur down 4.29 (0.25%) to 1,707.66, while the Straits Times rose 82.39 points (1.68%) to 4,835.25.