US-Venezuela Conflict Could Trigger Indonesian Financial Market Turbulence in Early 2026

JAKARTA - Capital market analyst and founder of Republik Investor Hendra Wardana said global sentiment, especially the warming of relations between the United States (US) and Venezuela, will be the dominant factor affecting the movement of the financial market at the beginning of 2026.

"The issue of the arrest of the President of Venezuela (Nicolas Maduro) by the US authorities increases geopolitical tensions and directly impacts global risk perceptions," said Hendra, quoted by Antara, Monday, January 5.

Hendra explained that the heating of relations between the US and Venezuela has the potential to increase investor risk aversion at the global level in the short term.

He said Venezuela is the country with the largest oil reserves in the world, so any escalation of the conflict has the potential to disrupt global energy supply stability.

"This condition encourages oil prices to move volatile and tend to strengthen in the short term," said Hendra.

Regarding the Composite Stock Price Index (JCI), he projected it would weaken to test the support area in the range of 8,642 to 8,672 on Monday (05/01) trading.

"The area is a crucial level to measure market strength, while the nearest resistance remains at the historical peak level of 8,777," said Hendra.

On the other hand, according to him, this situation will provide a positive sentiment for energy and commodity sector stocks.

However, it will still increase investor concerns about inflation and global uncertainty, thus encouraging a wait-and-see attitude, especially from foreign investors.

Apart from the US and Venezuelan factors, he explained that the movement of the JCI in the next week will also be influenced by expectations of the direction of global interest rate policies, the movement of the rupiah exchange rate against the US dollar, and the dynamics of foreign funds flows in emerging markets.

From within the country, he said market participants were paying attention to the continuity of the government's pro-market economic policies, macroeconomic stability, and the realization of the initial performance of large-cap emitters.

"This combination of global and domestic sentiments makes the movement of the JCI tend to be fluctuating, but is still in a healthy consolidation phase as long as the main support can be maintained," said Hendra.

In the long-term medium term context, according to him, the projection of the JCI breaking through the level of 10,000 by the end of 2026 is indeed ambitious, but still within a realistic corridor when associated with the foundation of the Indonesian capital market.

"The beginning of 2026 was also opened with positive sentiments, reflected by the strengthening of the JCI by more than 1 percent on the first trading day with a large transaction value, indicating market confidence in the prospects for the national economy is still quite solid," said Hendra.

However, to reach the psychological level of 10,000, according to him, the strengthening of the JCI still requires sustainable fundamental support.

In addition, he continued, the growth in the earnings of issuers, especially large-cap stocks, will be the main motor of the index.

Then, the possibility of the return of foreign fund flows in line with the increasing expectations of a decline in global interest rates, inflation stability, a controlled rupiah exchange rate, and the sustainability of quality IPOs will strengthen the capital market structure in the long term.

"In the midst of short-term volatility due to geopolitical sentiments, the more relevant strategy is to be selective and to use corrections as trading opportunities as well as limited accumulation," said Hendra.

Overall, although global tensions due to the US and Venezuelan conflict have the potential to put pressure on the JCI in the short term, the increasingly mature domestic market structure and the prospect of earnings growth for issuers make the outlook for the JCI still constructive.

"As long as the support area of 8.642-8.672 is able to survive, the opportunity for the JCI to re-test the all-time high level at 8.777 remains open," said Hendra.

Data on the closing of trading on the Indonesia Stock Exchange (IDX) on Friday (02/01) afternoon, the JCI closed up 101.19 points or 1.17 percent to 8,748.13.

The frequency of trading shares was recorded as many as 3,127,022 transactions with a total number of shares traded as many as 51.14 billion shares worth Rp22.26 trillion. A total of 479 shares rose, 200 shares fell, and 131 did not move in value.