Investors Shift to Gold and the Dollar as the IHSG Comes Under Pressure from the Middle East Conflict

The Jakarta Composite Index (IHSG) again faced a heavy blow from the escalation of the Middle East conflict. As the domestic index plunged to the 7,500 level, investors rushed to shift funds into safe-haven assets. Market observer Reydi Octa highlighted gold, the United States dollar (USD) and US Treasuries as the safe-haven assets chosen by investors to protect their funds. The shift out of the equity market occurred while monitoring the easing of tensions between Iran and the United States and Israel. ‘Global investors typically shift part of their funds into safe-haven assets such as gold, US Treasuries, and the USD, while awaiting clarity on the direction of global sentiment and the easing of geopolitical tensions,’ Reydi said, quoted by Antara on Wednesday, 4 March 2026. IHSG closed down 343.19 points or 4.32 percent to 7,596.58 in the first trading session on Wednesday, 4 March 2026. The decline aligned with weakness in regional Asia stock exchanges. Reydi added that the IHSG weakness was also driven by various external sentiments. Profit-taking, as well as the rally in the previous days, also exerted pressure on the IHSG. He noted foreign investors conducted net selling, particularly in large-cap stocks. This action was driven by fund rotation into safer assets and global portfolio rebalancing amid market volatility. From a global perspective, Reydi said market participants remain influenced by geopolitical tensions and concerns over the path of global interest rates that have not fully subsided. This has triggered risk-off sentiment in many Asia regional stock exchanges.