OJK Responds to Stock Market Decline Amid Middle East Conflict
THE Financial Services Authority (OJK) states that geopolitical escalation affects all regional and global stock exchanges, causing most major market indices to weaken. Acting Head of the Capital Market Supervisory, Financial Derivatives, and Carbon Exchange Hasan Fawzi said the weakness is the market’s response to rising global uncertainty. ‘Stock markets do price in and risk-off events now and for the future,’ he said at a press conference at the Bank Indonesia complex on Tuesday, 3 March 2026.
Hasan regards price volatility across the Indonesian stock market, as reflected in the volatility of the Jakarta Composite Index (IHSG), as part of normal global transmission used as an initial risk assessment by investors amid the geopolitical escalation.
He assured that the OJK and the Indonesia Stock Exchange (BEI) have policies and instruments to maintain market stability amid global uncertainty. For instance, the policy of share buybacks without approval from the GMS (RUPS), the implementation of the auto-rejection below threshold, anticipated to restrain declines in particular stock prices, and trading halts.
Apart from policy and intervention instruments, Hasan reminded that market stability heavily depends on investor behaviour. Therefore he urged domestic retail investors active in the market to be cautious and remain rational, data-driven, and to monitor developments.
In addition, Hasan encouraged investors to price in risk and consider fundamental factors before deciding to invest amid geopolitical dynamics.
Reflecting on previous geopolitics escalations, Hasan said investors tend to shift or reposition their stock portfolios into safe-haven assets that are seen as more stable, such as gold, foreign exchange, and bonds. The market typically takes a wait-and-see approach too.
Therefore, Hasan said the OJK will monitor potential short-term capital outflows. ‘What we need to be mindful of together as part of the dynamics of the global condition in this context,’ he added.
He said the OJK and other bodies as well as the Joint Steering Committee (KSSK) will continue to intensively monitor and closely monitor liquidity and market risks to ensure stability in the financial services sector. According to Hasan, vigilance in facing potential transmission should be undertaken even though Indonesia’s economic fundamentals are currently relatively stable with macro indicators held steady.
Earlier this morning the IHSG weakened as investors adopted risk-off mode to anticipate higher global crude oil prices. The IHSG opened down 43.39 points or 0.55% at 7,896.38. Meanwhile, the LQ45, representing the 45 leading stocks, fell 3.29 points or 0.41% to 802.31.
Brent crude rose to around US$81-82 per barrel, while US WTI rose to around US$74-75 per barrel, after previously jumping nearly 10% intraday and reaching the highest level since 2024–2025.
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