IHSG Strengthens on 'Risk On' Sentiment as Geopolitical Tensions Ease

The Indonesian Composite Index (IHSG) of the Indonesia Stock Exchange (BEI) moved higher on Wednesday, following gains in Asian and global markets, triggered by investors adopting a risk-on stance as geopolitical tensions between the United States (US) and Iran eased. The IHSG opened 18.98 points, or 0.30 percent, higher at 6,338.59. Meanwhile, the LQ45 index of 45 leading stocks rose 1.25 points, or 0.20 percent, to 636.46. “As long as the IHSG can hold above the 6,246-6,211 area, it has the opportunity to continue rising to test resistance at 6,377, then 6,450, up to 6,500. Meanwhile, if it moves back below the EMA50, the IHSG has the potential to experience a healthy pullback with support areas at 6,246, 6,211, and 6,161,” said Liza Camelia Suryanata, Head of Research at Kiwoom Sekuritas Indonesia, in her analysis in Jakarta on Wednesday. From abroad, geopolitical sentiment improved following optimism over diplomatic efforts between the US and Iran. US Treasury Secretary Scott Bessent stated that the chances of reaching an agreement to reopen the Strait of Hormuz were increasing, while Qatar confirmed that negotiations were still ongoing with a focus on de-escalating the conflict and restoring the strategic shipping lane. On the other hand, the US government is reportedly preparing a minimum price policy and import tariffs for polysilicon and its derivative products as part of efforts to reduce China’s dominance in the semiconductor and solar panel supply chain. The policy, expected to be announced at the end of August 2026 after the completion of the Section 232 Trade Expansion Act investigation, could potentially increase protection for US domestic producers such as Hemlock Semiconductor and Wacker Chemie. Liza stated that the move has sparked concerns over rising production costs in the semiconductor, solar panel, electric vehicle, and consumer electronics industries, potentially adding to global supply chain uncertainty.