IHSG weakens following Asian market declines amid crude oil price volatility

Jakarta — Indonesia’s composite stock index (IHSG) at the Indonesia Stock Exchange (BEI) closed down on Thursday afternoon, tracking weakness across the Asian markets region amid volatility in global crude oil prices.

The IHSG closed lower by 27.28 points or 0.37 per cent to 7,362.12. Meanwhile, the blue-chip index comprising 45 leading stocks, the LQ45 index, fell 1.06 points or 0.14 per cent to 751.19.

“Negative sentiment stems partly from the ongoing conflict between the United States and Iran, which has caused crude oil prices to strengthen again,” said Ratna Lim, Head of Research at Phintraco Securities, in her analysis in Jakarta on Thursday.

From abroad, rising crude oil prices have increased concerns about potential inflation and a widening state budget deficit, as well as potential deficits in the oil and gas trade balance.

Reports of attacks on several tankers in the Middle East region have driven crude oil price increases. These reports emerged shortly after the International Energy Agency (IEA) announced the release of crude oil reserves on the largest scale in its history.

With no signs of de-escalation in the Persian Gulf, crude oil prices remain traded at elevated levels, as there are yet no visible signs that disruptions to oil flows through the Strait of Hormuz will end.

The IEA’s decision also signalled the high risk of oil supply disruptions and indicated that the IEA does not believe this conflict will end soon.