Oil Prices Fall and Conflict Eases, Will IHSG Rebound? Retail Investors Advised to Accumulate Gradually
JAKARTA, KOMPAS.com - Geopolitical tensions in the Middle East are beginning to ease. The United States government has signalled the potential cessation of the conflict with Iran. This development is becoming a new catalyst for financial markets, including Indonesia.
Global oil prices are falling in line with the easing tensions. This situation opens up room for the Composite Stock Price Index (IHSG) to strengthen at the start of the week on Monday (4/5/2026), after previously being under pressure.
Oil supplies were disrupted since the Iran war on 28 February. The Strait of Hormuz was affected. This route is crucial for the global distribution of oil and gas.
US crude oil futures contracts fell 3 per cent to 101.94 US dollars per barrel. Brent crude fell nearly 2 per cent to 108.17 US dollars per barrel. Both are still up around 78 per cent since the beginning of 2026.
Capital market observer and Founder of Republik Investor, Hendra Wardana, views this situation as a “fresh wind” for the domestic stock market. The decline in oil prices is seen as pressuring concerns over global inflation. Expectations for interest rate policies are becoming more stable.
“For the Indonesian stock market, this condition has the potential to be a ‘fresh wind’ after previously being burdened by the surge in global inflation and interest rate pressures. With the fall in oil prices, inflation concerns can ease, thus making global monetary policy expectations more stable,” said Hendra to Kompas.com on Sunday night (3/5/2026).
The easing of geopolitical tensions and oil prices is encouraging foreign investor interest in emerging markets, including Indonesia. Fund inflows are expected to enter selectively and gradually.
“This inflow is expected to remain selective and gradual, not aggressive, considering that global investors still take into account other factors such as the direction of US interest rates, dollar movements, and the stability of the rupiah exchange rate,” he explained.