Jakarta Composite Index (JCI) tumbled 143 points or 1.7% to 8,092 at Monday’s opening as markets turned risk-off after US–Israeli strikes on Iran rattled global investors and sent oil prices surging.

The JCI moved within a range of 8,049–8,132 shortly after the opening bell. Within the first 10 minutes of trading, volume reached 8 billion shares with turnover exceeding Rp 4.94 trillion ($293.51 million) across more than 590,000 transactions. Declining stocks dominated the market with 623 losers, compared with 75 gainers and 37 unchanged.

BRI Danareksa Sekuritas said the JCI is expected to move volatile on Monday with a downward bias amid rising global risk-off sentiment following the escalation of tensions between the United States, Israel and Iran, which has prompted investors to shift toward safe-haven assets.

Meanwhile, Pilarmas Investindo Sekuritas warned that concerns over the Strait of Hormuz and Asia’s heavy reliance on Middle Eastern oil could intensify market anxiety.

Asia purchases more than 80% of crude oil produced in the Middle East, and around 90% of that volume passes through the Strait of Hormuz, the brokerage noted. China imports roughly 14% of its crude oil from Iran, while its plastics industry also relies heavily on Iranian supply, with about a quarter of inputs sourced from the country.

Some shipping fleets have reportedly halted operations, increasing the risk of higher global oil prices. “In conditions like this, market participants and investors tend to avoid risky assets and begin reallocating portfolios to secure potential returns,” Pilarmas said.

Despite the global pressure, BRI Danareksa Sekuritas said the JCI’s downside could be relatively limited given the index’s large exposure to commodity-based stocks that may benefit from rising energy and gold prices.

Indo Premier Sekuritas equity analyst Imam Gunadi said higher oil and coal prices could support Indonesia’s energy and mining sectors if commodity prices remain elevated. “As a coal exporter and producer of several energy commodities, Indonesia could benefit from higher average selling prices and potential margin improvements for related issuers,” Imam said. “In periods of global uncertainty, commodity-based stocks often serve as a hedge against geopolitical risk and global inflation,” he added.

However, Imam warned that a prolonged surge in energy prices could heighten global inflation risks and place pressure on the rupiah.

“A significant increase in oil prices could widen pressure on the current account through higher oil and gas import values while also increasing rupiah volatility,” he said. “If the rupiah weakens and global bond yields rise, JCI volatility could increase as foreign investors tend to reduce exposure to risky assets,” Imam added.

On the domestic front, the government has raised export levies on crude palm oil (CPO) and its derivatives starting Mar. 2, aiming to boost productivity and downstream palm oil industries.

The CPO export levy increased to 12.5% from 10% of the reference price.

Pilarmas said the higher levy could increase funding for the Indonesian Palm Oil Plantation Fund Management Agency (BPDP) to support downstream programs, smallholder replanting and biodiesel subsidies.

However, the policy could also raise export costs and potentially reduce the global competitiveness of Indonesian CPO, particularly when reference prices are high. In the short term, Pilarmas said the policy may also pressure fresh fruit bunch (FFB) prices at the farmer level if exporters pass on the additional costs through the supply chain.

The brokerage estimates the policy could create short-term margin pressure of around 3–5% for exporters. Over the medium term, however, stronger funding for downstream programs could improve industry productivity and domestic value-added.

Global markets reacted sharply to the geopolitical escalation.

Asian equities opened broadly lower. Japan’s Nikkei 225 fell 2.4% to 57,430, Hong Kong’s Hang Seng declined 1.23% to 26,305, and China’s Shanghai Composite slipped 0.26% to 4,151. While South Korea's Kospi closed for holiday.

Oil prices surged as the conflict raised concerns about supply disruptions.

The price of US benchmark crude oil jumped 6.8% to $71.58 per barrel, while Brent crude climbed 7.5% to $78.33 per barrel.

Energy experts said prolonged attacks could push crude and gasoline prices even higher. Iran exports roughly 1.6 million barrels of oil per day, mostly to China, which may need to seek alternative supplies if exports are disrupted.

Still, analysts noted that markets had partly anticipated the escalation following a large buildup of US forces in the Middle East.

On Friday, the S&P 500 fell 0.4%, marking only its second losing month in the past 10. The Dow Jones Industrial Average dropped 1.1%, while the Nasdaq Composite declined 0.9%.

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