Analysts Warn of Risk of Downturn in JCI Following US-Israeli Attack on Iran

JAKARTA - Capital market analyst and Founder of Republik Investor Hendra Wardana reminded the risk of pressure on the Composite Stock Price Index (IHSG) this week, following the heating of the conflict in the Middle East region.

As is known, the United States and Israel launched a military aggression against Iran on Saturday, February 28. The attack was confirmed to have killed the Supreme Leader of Iran, Ayatollah Ali Khamenei, along with a number of other high-ranking officials.

According to Hendra, the heating of the conflict between Iran, the United States (US) and Israel is not merely a political issue, but has entered the realm of economic risk at the global level.

"The market immediately responded with a risk-off pattern. Global investors tend to get out of risky assets and seek protection in safe haven assets," said Hendra, quoted by Antara, Monday, March 2.

If the escalation of the conflict disrupts the flow of tanker ships in the Strait of Hormuz, according to Hendra, it could cause global oil prices to soar higher as the market recalculates supply risks.

"The impact can spread to global inflation, exchange rates, to interest rate policies in various countries," said Hendra.

Meanwhile, for the Indonesian capital market, he explained that pressure could come from two sides, including first, the potential for capital outflow (capital flow) because foreign investors reduce exposure in emerging markets.

Then, second, the risk of import inflation due to the surge in energy prices globally.

If the oil price remains at a high level, he said this could cause production costs to increase and the company's recorded margin (emiten) could be depressed.

"In this condition, the JCI has the potential to move weaker and test the classic support at the level of 8.133. If the level is broken, the psychological area of 8,000 becomes the next support. Meanwhile, the nearest resistance is at 8,300," said Hendra.

However, according to him, not all sectors will be negatively affected.

For retail investors, Hendra recommends that the best attitude is discipline and selectivity.

"If you have an aggressive profile, the momentum in the commodity sector can be utilized with strict risk management," said Hendra.

Meanwhile, for conservative investors, according to him, the wait and see strategy remains relevant while monitoring the development of conflicts and foreign fund flows.

"In a hot geopolitical situation, the key is not just entering or exiting the market, but the ability to read the rotation of the sector and keep risks under control," said Hendra.

Data on the closing of trading on Friday, February 27 last week, the JCI closed up 0.23 points or 0.00 percent to 8,235.49. Meanwhile, the group of 45 leading stocks or the LQ45 index fell 3.53 points or 0.42 percent to 834.36.

The frequency of trading shares was recorded as many as 2,526,942 transactions with a total number of shares traded as many as 47.64 billion shares worth Rp38.24 trillion. A total of 341 shares rose, 315 shares fell, and 163 did not move in value.