Jakarta. Jakarta Composite Index (JCI) fell 0.01% or 0.53 point to 7,378 in early Friday trading, as escalating US-Iran tensions and rising energy risks weighed on investor sentiment.

Within the first four minutes of trading, total volume reached 3.5 billion shares, with turnover at Rp 1.6 trillion ($92.6 million) across more than 205,000 transactions. Decliners outpaced gainers, with 347 stocks falling, 186 advancing, and 173 unchanged.

Kiwoom Sekuritas Indonesia said global sentiment is being dominated by the intensifying conflict between the United States and Iran, despite an indefinite extension of a ceasefire.

Tensions have escalated sharply after Iran seized vessels and asserted military control over the Strait of Hormuz. In response, the US tightened its naval blockade and stepped up military operations, including issuing direct orders to fire on mine-laying ships. Negotiations remain stalled, with Iran refusing talks while the blockade continues, and the US insisting on full access to the Strait.

“Mediators such as Pakistan, Turkey, and Egypt are attempting to facilitate further talks, but no meaningful progress has been achieved. There are also indications the conflict could escalate again, with Israel stating it is ready to resume attacks,” Kiwoom said.

The brokerage added that markets are shifting from a “hope-driven rally” to “reality pricing,” as energy supply disruptions are increasingly seen as prolonged.

“The transmission mechanism is becoming clearer: rising oil prices lead to higher inflation, which lifts interest rate expectations, strengthens the dollar, and ultimately pressures risky assets and gold,” it said.

On the domestic front, Kiwoom noted that the Indonesia Stock Exchange (IDX) is tightening issuer quality through Regulation I-A, introduced on March 31, 2026, combining sanctions with continuous guidance to improve listing standards and market competitiveness.

As of April, the IDX has intensified regulatory outreach, including free float education and monthly sanction disclosures, alongside stricter monitoring and enforcement. The exchange imposed 845 sanctions on 494 issuers in the first quarter of 2026 under Regulation I-H, with violations in the “others” category jumping 50% to 174 cases, mainly related to free float compliance, bond fund readiness, and reporting quality.

Separately, the government is operating in what Kiwoom described as “survival mode,” following directives from President Prabowo Subianto, adopting a more aggressive policy approach through task force formation, tighter natural resource management, budget efficiency, and a push for downstreaming and energy security to sustain growth toward the 8% target.

“Purbaya emphasized that about 90% of Indonesia’s economy is still driven by domestic consumption, making purchasing power critical, and stressed that in this situation ‘there is no more room for half-hearted policies,’” Kiwoom wrote in its Friday report.

On Wall Street, US stocks retreated from record highs on Thursday amid mixed earnings results and renewed geopolitical concerns. Oil prices jumped on fears of further escalation in the Iran conflict.

The S&P 500 fell 0.4%, snapping a weeks-long rally that had erased earlier war-driven losses and pushed the index to record levels. The Dow Jones Industrial Average dropped 179 points, or 0.4%, while the Nasdaq Composite declined 0.9%.

Tesla weighed on the market, falling 3.6% despite reporting stronger-than-expected quarterly results, as investors focused on a sharp increase in planned capital spending.

“You should expect to see a very significant increase in capital expenditures,” Elon Musk told investors, adding that the spending is justified by expectations of significantly higher future revenue.

In Asia on Friday at 9 a.m. Jakarta time, Japan’s Nikkei 225 rose 0.52% to 59,449, while South Korea’s Kospi fell 0.22% to 6,461. Hong Kong’s Hang Seng dropped 0.94% to 25,670, and China’s Shanghai Composite slipped 0.58% to 4,069.

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