JCI Closes Up 1.93%, Will Middle East Geopolitical Sentiment Subside?

JAKARTA, KOMPAS.com - The Jakarta Composite Index (JCI) closed higher in trading on Wednesday (1/4/2026). The index rose 136.216 points or 1.93% to the level of 7,184.438. The JCI opened at 7,149.253 and briefly touched an intraday high of 7,207.166. Meanwhile, the lowest level was 7,136.249. In terms of liquidity, trading activity was brisk with a transaction volume of 31.504 billion shares and a turnover value of Rp16.472 trillion. The transaction frequency was also high, exceeding 2 million times. The majority of stocks were in the green zone, with 475 stocks strengthening compared to 209 weakening, and 135 stagnant. The Indonesia Stock Exchange’s market capitalisation also increased to Rp12,675.508 trillion. Capital market analyst and Founder of Republik Investor, Hendra Wardana, said that the JCI’s movement is still influenced by geopolitical sentiment in the Middle East and is not solely determined by company fundamentals. “Share market movements are no longer solely determined by company fundamentals, but are more influenced by external factors, namely Middle East geopolitics, world oil prices, and the direction of global interest rates,” Hendra told Kompas.com. The conflict involving the United States, Israel, and Iran has kept world oil prices high above $100 per barrel. This condition is triggering concerns that global inflation will rise again, so central banks like the Fed may hold interest rates high for longer. Furthermore, the Dow Jones’ 2.49% rise also provides short-term positive sentiment, so the JCI has the potential to rebound and test the 7,200 level, although volatility will remain high. He assesses that as long as oil prices stay high and global interest rates have not fallen, the JCI will move volatilely in the range of 7,000 to 7,200. However, if geopolitical tensions ease, oil prices fall, inflation drops, and interest rates start to decline, global liquidity will return to emerging markets and the JCI has the potential for a stronger rise.