Rising Oil Prices and Geopolitical Risks Pressure Rupiah and Indonesian Stocks

RRI.CO.ID, Jakarta - Indonesia’s financial markets faced renewed pressure on Monday, April 6, 2026, as the rupiah weakened and the Jakarta Composite Index (IHSG) slipped, with investors unsettled by surging global oil prices and escalating tensions in the Middle East.

The rupiah fell 16 points, or 0.09 percent, to IDR 16,996 per US dollar from IDR 16,980 previously. Lukman Leong, currency analyst at Doo Financial Futures, said the decline was driven by fears of prolonged conflict. “The rupiah is expected to weaken against the dollar amid concerns over escalating war in the Middle East and persistently high crude oil prices,” he said in Jakarta, Monday, as quoted by Antara.

West Texas Intermediate (WTI) crude briefly spiked to USD 115 per barrel before easing to USD 112. The US dollar index also strengthened, supported by stronger-than-expected employment data. Non-farm payrolls rose by 178,000 in March, far exceeding economists’ forecast of 59,000, while the unemployment rate edged down to 4.3 percent from 4.4 percent.

The IHSG opened lower, dropping 25.22 points or 0.36 percent to 7,001.56. The LQ45 index, which tracks 45 leading stocks, fell 3.05 points or 0.43 percent to 711.53.

Phintraco Sekuritas Head of Research Ratna Lim noted that the IHSG could retest the 6,900–7,000 range. She cautioned that sustained high oil prices could widen Indonesia’s fiscal deficit if the government increases fuel subsidies without reallocating other spending. “This situation could trigger capital outflows and further depreciation of the rupiah,” Ratna said.

Investors remain focused on developments in the Strait of Hormuz, a vital oil shipping route. US President Donald Trump has warned Iran to reopen the strait by April 6, 2026, or face large-scale military escalation. He also threatened strikes on Iranian infrastructure, declaring that Tehran would “suffer” if Hormuz remains closed.

Beyond geopolitics, markets are awaiting key US economic releases this week, including the Federal Reserve’s FOMC minutes, inflation data, preliminary Michigan consumer sentiment, and the Personal Consumption Expenditure (PCE) inflation index.

Domestically, new regulations requiring disclosure of High Shareholding Concentration (HSC) could spark short-term volatility, particularly in low-liquidity stocks, though analysts expect the rules to improve transparency and market liquidity over time. Investors are also watching upcoming indicators, including foreign exchange reserves (April 8), consumer confidence, and automotive sales (April 10).

European markets closed mostly lower last Thursday (April 2), with the Euro Stoxx 50 down 0.70 percent, Germany’s DAX off 0.56 percent, and France’s CAC 40 slipping 0.24 percent. The UK’s FTSE 100 rose 0.69 percent.

On Wall Street, the Dow Jones Industrial Average dipped 0.13 percent to 46,504, while the S&P 500 gained 0.11 percent to 6,582 and the Nasdaq Composite rose 0.18 percent to 21,879.

Asian markets opened mixed on Monday. Japan’s Nikkei surged 559.51 points or 1.05 percent to 53,683.00. China’s Shanghai Composite fell 39.19 points or 1.00 percent to 3,880.10, Hong Kong’s Hang Seng dropped 117.50 points or 0.70 percent to 25,116.53, while Singapore’s Straits Times Index added 11.92 points or 0.24 percent to 4,959.42. ***