JCI Drops 0.73% as Oil Prices, US-Iran War Weigh on Stocks

Jakarta. Indonesian stock market extended its decline on Friday as escalating US-Iran tensions pushed oil prices higher and fueled concerns over inflation, interest rates and global energy supplies.

Jakarta Composite Index (JCI) fell 0.73%, or 47 points, to 6,541, after moving between 6,462 and 6,552 during the session.

Trading volume reached 30.45 billion shares, with turnover of Rp 14.68 trillion ($47.37 million) across more than 1.9 million transactions. A total of 183 stocks rose, 453 fell and 153 were unchanged.

Pilarmas Investindo Sekuritas said escalating tensions between the United States and Iran weighed on market sentiment as investors grew increasingly concerned about disruptions to global energy supplies.

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“The prolonged conflict has raised concerns over disruptions to global energy supplies,” Pilarmas wrote in a research note Friday.

Oil prices remained elevated after US President Donald Trump said he did not expect the Iran war to end before the US midterm elections in November. Trump also said oil prices were unlikely to decline before then.

The prospect of crude prices staying above $100 per barrel could intensify inflationary pressures while increasing the government’s burden through energy subsidies, Pilarmas said.

Higher energy prices could also keep inflation elevated for longer, strengthening expectations that the Federal Reserve will keep interest rates high for an extended period.

“This could reinforce market expectations that the Fed will keep interest rates high for longer,” Pilarmas said.

Such expectations could weigh on risk assets, including stocks, as higher US interest rates and bond yields make dollar-denominated assets more attractive.

“Market participants are also awaiting the next series of US inflation data to see whether higher energy prices are beginning to have a broader impact on price pressures,” Pilarmas said.

Domestically, investors also took note of Bank Indonesia’s retail sales survey, which showed the Real Sales Index (IPR) grew 1.1% year-on-year in July 2026, improving from a 3% contraction in June.

The recovery in retail sales suggests consumer demand remains resilient. However, higher global oil prices could put further pressure on the state budget by increasing energy subsidy requirements.

Elsewhere in Asia, Japan’s Nikkei 225 fell 1.9%, South Korea’s Kospi lost 1.8%, Hong Kong’s Hang Seng slipped 0.7% and the Shanghai Composite declined 1.2%.

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