US Dollar and Oil Volatility Triggers Market Fluctuations, Indonesian Stock Market Deemed Resilient
JAKARTA, KOMPAS.com — Turbulence in global financial markets due to escalating conflicts in the Middle East is beginning to affect the movements of several major world assets, from the US dollar and oil to gold.
Changes in the dynamics of these three macro assets are also shaping investor sentiment towards emerging markets, including Indonesia.
Allianz Global Investors (AllianzGI) Indonesia views these three instruments as closely interconnected and influential on market direction and sectoral performance in the stock market.
“The strengthening of the US dollar can create short-term pressure on the rupiah and capital flows in emerging markets, which may affect interest-rate sensitive and domestically oriented stocks. However, Indonesia’s relatively strong macroeconomic fundamentals help mitigate that volatility,” said Octavius in a written statement on Thursday (23/4/2026).
According to him, US dollar movements are one of the indicators continuously monitored by investors because their impact can spread to various sectors, especially issuers sensitive to interest rate changes.
Amid this pressure, AllianzGI Indonesia assesses that the domestic stock market still demonstrates resilience, although sectoral performance is expected to become increasingly varied.
In addition to the US dollar, AllianzGI Indonesia highlights the impact of rising oil prices triggered by geopolitical tensions.
Octavius explained that the rise in oil prices brings diverse effects to the economy and stock market. On the positive side, the energy sector is considered to have the potential to record superior performance amid rising commodity prices.
However, on the other hand, the surge in oil prices can also generate inflationary pressures and increase fiscal burdens related to energy subsidies, which AllianzGI believes investors need to pay attention to.
“Selective exposure to energy and commodity stocks can provide diversification benefits while serving as a hedge against inflation. Currently, active stock selection and sector rotation are key, as global macro dynamics will continue to trigger differences in returns in the stock market,” Octavius clarified.
This emphasis on sector rotation indicates that in volatile conditions, differences in performance between sectors are expected to become more pronounced, making investment strategies increasingly selective.