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| IHSG is projected to weaken as global oil prices surge above $100 per barrel amid escalating Middle East tensions affecting global energy markets. |
The Indonesia Composite Index (IHSG) is projected to weaken in Monday’s (March 9) trading session. One of the main market pressures comes from the surge in global oil prices, which have climbed above 100 US dollars per barrel.
Associate Director of Research and Investment at Pilarmas Investindo Sekuritas, Maximilianus Nico Demus, also known as Nico, said external sentiment continues to influence the stock market in the short term.
“Based on technical analysis, we see the IHSG likely to weaken in a limited range with support and resistance levels at 7,460–7,860,” Nico said in his research note in Jakarta on Monday.
The rise in global oil prices is largely driven by escalating geopolitical tensions in the Middle East. Reports indicate that United States and Israeli forces targeted several Iranian military facilities and energy infrastructure.
The attacks reportedly struck oil storage depots and related facilities around Tehran and the Alborz province, triggering large fires at key energy sites.
In response, Iran launched a series of ballistic missile and drone strikes targeting Israel and several United States military assets, including bases located in parts of the Middle East.
The ongoing conflict has raised concerns about disruptions to global oil trade. The Middle East region, particularly the Strait of Hormuz, plays a crucial role in global energy distribution.
As of 07:50 WIB on Monday morning, global oil prices continued to surge. West Texas Intermediate (WTI) crude oil reached 109.82 US dollars per barrel, while Brent crude touched 109.53 US dollars per barrel.
Nico assessed that the escalation of attacks on Iranian energy facilities could further push global oil prices higher due to the increased risk of supply disruptions.
This risk could intensify if the conflict affects shipping routes in the Strait of Hormuz, which handles roughly one-fifth of global oil trade.
Domestically, the Indonesian government is also considering adjusting the budget for the Free Nutritious Meals Program (MBG) or potentially increasing subsidized fuel prices if higher global oil prices put pressure on the 2026 State Budget (APBN).
Without policy adjustments, the fiscal deficit could widen to around 3.6 percent of Gross Domestic Product (GDP).
The government may implement spending efficiency measures and delay several infrastructure projects to maintain fiscal discipline and prevent the deficit from expanding further.
However, such policies could slow down development projects and economic activity in the construction sector.
Nico added that if the government eventually raises subsidized fuel prices, the move could trigger higher inflation, increase transportation and logistics costs, and weaken household purchasing power.
Pressure from global markets is also contributing to the cautious sentiment.
On Friday (March 6), major US stock indices on Wall Street closed lower. The Dow Jones Industrial Average fell 0.95 percent to 47,501.55, the S&P 500 declined 1.33 percent to 6,740.02, and the Nasdaq Composite dropped 1.59 percent to 22,387.68.
Meanwhile, in domestic trading on Friday (March 6), the IHSG closed down by 124.85 points or 1.62 percent to 7,585.68. The LQ45 index also fell 11.77 points or 1.49 percent to 776.04.
With both global and domestic pressures in play, market participants are expected to closely monitor geopolitical developments and movements in global oil prices, which could influence the direction of the IHSG in the near term.
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