Jakarta. Indonesian stocks tumbled nearly 2% on Friday, dragging the benchmark index back to the 6,100 level as a surge in global oil prices and fresh US import tariffs fueled concerns over inflation, higher interest rates, and slowing global growth.

Jakarta Composite Index (JCI) fell 118 points, or 1.88%, to close at 6,196 after trading between 6,159 and 6,268. Total trading volume reached 37.6 billion shares worth Rp 17.62 trillion ($981.07 million) across more than 2.2 million transactions. Losers overwhelmingly outnumbered gainers, with 587 stocks declining, 104 advancing, and 105 unchanged.

Pilarmas Investindo Sekuritas said the market was first pressured by Brent crude prices climbing back above $100 per barrel after Houthi rebels attacked a Saudi oil tanker in the Red Sea, escalating tensions in the Middle East.

The situation intensified after US President Donald Trump threatened to destroy Iran's infrastructure if further attacks on vessels in the Strait of Hormuz occur, raising fears of disruptions to global energy supplies.

"The surge in energy prices increases inflation risks and reinforces expectations that global interest rates will remain higher for longer, reducing investors' appetite for risk assets, including equities," Pilarmas wrote in a research note on Friday.

The brokerage said sentiment was further weakened by the implementation of new US import tariffs of between 10% and 12.5% on around 60 major trading partners. The tariffs could disrupt global supply chains, slow world economic growth, and increase the risk of stagflation.

Pilarmas warned that both external factors could also weigh on Indonesia's economy. Higher oil prices are expected to increase the government's energy subsidy burden, narrow fiscal space, and add inflationary pressure.

"In addition, the US tariff policy could weaken export performance, raise the risk of a trade deficit, put pressure on the rupiah, and erode household purchasing power if inflationary pressures persist," the brokerage said.

Finance Minister Purbaya Yudhi Sadewa acknowledged that higher global oil prices would affect the 2026 state budget, particularly spending allocations for ministries, government agencies, and regional administrations. However, he stressed that the country's fiscal position remains secure.

"When oil prices were falling, I thought there was room to increase spending for regional governments and ministries. Now that prices have risen again, that room has become more limited, but it does not endanger the state budget itself," Purbaya said at the Finance Ministry on Friday.

"Ministries, agencies, and regional governments may simply have less flexibility than before," he added.

Regional markets also closed sharply lower. South Korea's Kospi plunged 5.7%, Japan's Nikkei 225 lost 2.7%, while Hong Kong's Hang Seng Index and China's Shanghai Composite each fell 1.4%.

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