US-Iran Tensions Shake the IDX: IHSG Drops 2.65% as Energy Stocks Defy the Slump
Intan
from Orbitcore Editorial
The Indonesian stock market faced a turbulent session on Monday (2/3), as geopolitical tensions halfway across the globe sent ripples through local trading floors. The Jakarta Composite Index (IHSG) closed the day with a significant decline of 2.65%, or 218.65 points, landing at the 8,016.83 level. This sharp correction effectively wiped out approximately Rp318 trillion from the Indonesia Stock Exchange (BEI) market capitalization in a single day.
Despite the heavy selling pressure, market activity remained incredibly high. Total transactions reached a staggering Rp29.84 trillion, which included Rp1.14 trillion from the negotiation market. The sheer volume of movement was evident in the trading frequency, which clocked in at 3.65 million transactions as investors scrambled to rebalance their portfolios in response to the escalating conflict between the United States and Iran.
The Sectoral Divide: Energy Stands Alone
While the broader market was painted red, the energy sector emerged as a solitary beacon of growth. As most sectoral indices struggled from the opening bell, cyclical consumer stocks took the hardest hit, plummeting by 4.13%. However, the energy sector bucked the trend entirely, fueled by the direct correlation between geopolitical instability in the Middle East and global oil prices.
Large-cap energy stocks didn't just grow; they soared. Several major players recorded gains exceeding 15%, driven by the anticipation of rising crude prices. PT Energi Mega Persada Tbk (ENRG) led the charge with a massive 25% jump. Other notable performers included PT Elnusa Tbk (ELSA) rising 17.65%, PT Medco Energi Internasional Tbk (MEDC) gaining 15.65%, and PT Indika Energy Tbk (INDY) closing up 15.53%.
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Analyzing the Fear: Inflation and Interest Rates
According to analysts from Phintraco Sekuritas, the market’s downturn is a direct reflection of a shift toward a 'risk-off' sentiment. Investors are currently ditching riskier assets in favor of safer havens as they weigh the consequences of the US-Iran war. The primary concern is that rising crude oil prices will inevitably lead to higher global inflation. If inflation spikes, central banks may be forced to hike interest rates, a move that typically dampens stock market performance.
However, it isn't all gloom and doom for the IHSG. Analysts pointed out that despite the heavy sell-off, the index managed to stay above the critical psychological support level of 8,000. Furthermore, the IHSG is still positioned above the 200-day Moving Average (MA200), which serves as a vital indicator for the long-term bullish trend. This suggests that while the short-term shock is painful, the long-term structural health of the market remains intact for now.
A Regional Contagion across Asia
Indonesia was far from alone in this downturn. The tension in the Middle East triggered a wave of selling across emerging markets in Asia. Other regional indices suffered even deeper losses; Thailand’s SET index dropped by 4.04%, while the Philippines' PSEi fell by 2.79%. Meanwhile, Hong Kong’s Hang Seng index also felt the pressure, closing down 2.14%. As global markets remain on edge, all eyes will be on the next geopolitical developments to see if the IHSG can maintain its footing above the 8,000 mark.