Oil Prices Return to $80, Market Wary of Impact on IHSG
JAKARTA – Global oil prices moved back above US$80 per barrel at the start of the week amid market scepticism over the implementation of a peace agreement between the United States and Iran. The situation is adding to investor caution in global financial markets, including the Indonesian stock market.
“The fragile implementation of the peace deal means risks to the energy market, inflation, and global sentiment must still be closely watched,” Kiwoom Sekuritas wrote in a research note on Monday.
Reuters reported that Brent crude prices returned to above US$80 per barrel early in the week amid uncertainty in US-Iran relations. The uncertainty has also raised concerns over the stability of global energy supplies and shipping activity in the Strait of Hormuz, one of the world’s main oil trade routes.
Beyond geopolitical developments, investors are also awaiting the direction of US monetary policy after the Federal Reserve signalled a more hawkish stance at its last meeting. The market is now anticipating comments from several Fed officials for clues on the interest rate trajectory in the coming months.
Domestically, these external pressures continue to overshadow stock market movements. Although the Jakarta Composite Index (IHSG) strengthened 2.82 percent last week to 6,177.14, foreign investors still recorded substantial net selling.
Indonesia Stock Exchange (BEI) data shows foreign investors booked net sales of Rp 3.19 trillion on the last trading day of the week. Cumulatively since the start of the year, foreign net selling has reached Rp 82.76 trillion.
Kiwoom Sekuritas assesses that IHSG movement remains potentially volatile amid high global uncertainty. In addition to geopolitical developments and the Fed’s policy direction, market participants will also scrutinise China’s benchmark lending rate decision, or Loan Prime Rate (LPR), which is seen as potentially providing a picture of the direction of economic stimulus in the Bamboo Curtain country.
On the domestic front, investors are also highlighting developments in Indonesia’s Panda Bond issuance after the government secured support from the Chinese Government and the People’s Bank of China (PBOC) to accelerate the licensing process. Furthermore, the implementation of the B50 biodiesel programme, scheduled to take effect on 1 July 2026, is also considered a potential positive sentiment for the energy and palm oil sectors.
According to Kiwoom Sekuritas, the IHSG’s important support level lies in the range of 6,030 to 5,930. Meanwhile, the opportunity for stronger gains will only open if the index is able to break through the 6,300 level, which is the main resistance area.