Jakarta. Indonesia’s benchmark stock index opened lower on Monday as global oil shocks and geopolitical tensions in the Middle East dampened investor sentiment ahead of a shortened trading week.

Jakarta Composite Index (JCI) fell 21 points, or 0.3%, to 7,115 at the opening bell, extending last week’s decline. The index moved within a range of 7,076 to 7,120 during the early minutes of trading.

Market activity remained relatively cautious. A total of 923.64 million shares changed hands in early trade, with a transaction value reaching Rp 465.91 billion ($27.44 million) across 72,531 deals. Gainers totaled 146 stocks, while 319 declined and 202 remained unchanged.

Analysts said the market could remain under pressure this week as trading will only run for two sessions from March 16–17 before a long holiday break for Nyepi and Eid al-Fitr.

Hari Rachmansyah, an equity analyst at Indo Premier Sekuritas, said global energy supply concerns remain the key driver of risk sentiment after oil prices surged following Iran’s continued closure of the Strait of Hormuz since late February.

The strategic waterway is a vital route for global oil shipments.

Crude prices climbed again late last week, pushing the benchmark above $100 per barrel. Brent crude, the global standard, closed 2.7% higher at $103.14 per barrel, bringing its monthly gain to about 40%. US crude rose 3.1% to settle at $98.71 per barrel, up roughly 46% this month.

The surge in oil prices has intensified inflation concerns worldwide and pressured global equities.

Wall Street extended losses on Friday as markets reacted to the conflict involving Iran and the risk of prolonged supply disruptions.

The S&P 500 slipped 0.6% after briefly gaining earlier in the session and is now down 3.1% so far this year. The Dow Jones Industrial Average declined 0.3%, while the Nasdaq Composite dropped 0.9%. All three major US indexes also recorded their third consecutive weekly loss.

“Everything’s just trading with crude oil at this point,” said Michael Antonelli, a market strategist at Baird. “We’re basically in a holding pattern until we get the hour-by-hour, day-by-day news about the conflict in the Middle East.”

Hari said that the new Iranian leadership’s stance on keeping the Strait of Hormuz closed as leverage against rival nations has heightened market concerns over potential disruptions to global energy supplies and their inflationary impact.

However, the latest developments introduced some nuance after Iran’s Foreign Minister Abbas Araghchi stated that the Strait of Hormuz remains open for vessels not originating from the United States, Israel or their allies.

According to Hari, the geopolitical uncertainty is likely to keep global investors in a risk-off stance in the near term, meaning volatility in US equity markets could remain elevated until there is clearer visibility on the conflict and global energy supply stability.

Domestically, investors are also monitoring fiscal and monetary policy developments as rising global energy prices could put pressure on the government’s budget. Higher oil and coal prices may increase fiscal strain, potentially requiring swift policy responses to keep the state budget deficit under control.

“If the fiscal deficit widens further, risks could include higher government borrowing needs, pressure on sovereign bond yields and potential rupiah depreciation due to rising investor risk perception toward fiscal stability,” Hari said. A widening deficit could also limit fiscal stimulus capacity amid global uncertainty.

Market participants are also awaiting the outcome of Bank Indonesia’s board of governors meeting scheduled for March 16–17. The central bank is widely expected to keep the BI-Rate unchanged to safeguard exchange rate stability and manage inflation risks amid rising external pressures.

Hari said the combination of fiscal dynamics and monetary policy direction will likely become the main factors shaping short-term movements of the JCI.

Separately, Kiwoom Sekuritas Indonesia said the Indonesian government reiterated that the Agreement on Reciprocal Trade (ART) with the United States remains the foundation of bilateral trade relations amid ongoing US trade investigations.

“The government ensured it would follow the process while maintaining communication with US authorities and continuing the domestic ART implementation process, including consultations with the House of Representatives and ratification stages,” the brokerage said in a research note.

Across Asia, markets were mostly weaker. As of 9:33 a.m. Jakarta time, Japan’s Nikkei dropped 1.08% to 53,237, South Korea’s Kospi fell 0.16% to 5,478, and China’s Shanghai SSE slipped 0.54% to 4,073.

Hong Kong’s Hang Seng, however, rose 0.55% to 25,606.

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