Middle East Conflict Casts Shadow Over IHSG Movement This Week

Equity Analyst at PT Indo Premier Sekuritas, David Kurniawan, stated that the movement of the Jakarta Composite Index (IHSG) this week will continue to be overshadowed by geopolitical dynamics in the Middle East. Tensions have escalated again after Iran closed the Strait of Hormuz for an indefinite period. “Entering the week of 13-17 July 2026, market attention will centre on important economic agendas from abroad,” David said in a press release on Monday, 13 July 2026. One of the data points to be released is the United States inflation rate for June. According to David, this data will serve as the market’s main compass in reading the direction of global interest rate policy. In last week’s trading, the IHSG closed up 0.83 percent at 5,924. However, David noted that foreign investors recorded a net sell of Rp 1.7 trillion in the regular market. Meanwhile, the IHSG on Monday morning, 13 July 2026, moved higher as market participants observed the development of artificial intelligence (AI) stock valuations and geopolitics in the Middle East region. The IHSG opened up 10.36 points, or 0.17 percent, to 5,934. Meanwhile, the LQ45 index of top 45 stocks rose 0.03 points, or 0.01 percent, to 589.28. David explained that the high level of geopolitical uncertainty has caused investors to adopt a risk-off stance and become more conservative in managing their portfolios. As a result, global capital flows are now being diverted massively to safe-haven assets that are considered more stable and resilient, such as gold bullion and the US dollar. Domestically, IHSG movement last week was influenced by the realisation of the State Budget (APBN) deficit for the first semester of 2026. The government reported a budget deficit of Rp 196.5 trillion, equivalent to 0.76 percent of Gross Domestic Product. Although still within safe limits, David cautioned that the pace of state spending, which is faster than revenue, still sends a warning signal to fiscal authorities. “This condition demands that the government manage state financing much more tightly and selectively in the second half of the year,” he said.