Increasing Geopolitical Escalation of Israel and Iran Pressures JCI – 2024-04-22 12:30:34

Workers observe the screen displaying the movement of the Composite Stock Price Index (IHSG) on the Indonesia Stock Exchange (Antara)

DIRECTOR of Trade and Member Regulation of the Indonesian Stock Exchange (BEI), Irvan Susandy, said that the decline in the Composite Stock Price Index (IHSG) on Friday (19/4) trading was more due to the increase in escalation between Israel and Iran.

“This was responded negatively by stock exchanges in the Asian region, including Indonesia (down 1.82%),” said Irvan, Friday (19/4).

In trading on Friday (19/4), the JCI was corrected or -1.82% to the level of 7,036.206, from closing on Thursday (18/4) at the level of 7,166.68.

Based on the latest data, (almost) all Asian exchanges experienced declines ranging from -0.40% to -3.31%.

This means that there were several exchanges that fell deeper than Indonesia, such as the Philippines (-1.71%), Vietnam (-1.93%), Thailand (-1.81%) and Japan (-2.54%).

He asked to remain optimistic in responding to the existing phenomenon, even though he did not yet know what the continuation of the dispute between Israel and Iran would be like.

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“We certainly hope that this will not lead to open war between the two countries, because the effects can be felt by many other countries too. We will of course always monitor every development and coordinate with the OJK and other Self Regulatory Organizations (SROs),” said Irvan.

Separately, Director of PT. Profit Forexindo Berjangka Ibrahim Assuaibi said the strengthening of the US dollar exchange rate in trading Thursday (18/4) local time, did not much shake the view that the economy was still in strong condition.

“This suggests the US central bank The Federal Reserve is likely to delay its first interest rate cut since 2020 until the end of this year and the escalation of Iran and Israel is in focus,” said Ibrahim.

Also read: US Embassy in Israel Orders Employees to Restrict Movement

Comments from New York Fed President John Williams who said there was no urgent need to lower interest rates at this time given the strength of the economy, also helped lift the US dollar.

But strong US economic data and persistent inflation have prompted investors to drastically rethink the possibility of the Fed lowering interest rates in the near future.

Later, the Iran-Israel escalation came into focus after reports of explosions across Iran. Various media reports, including from Iranian news agencies, showed explosions in several areas of Iran, Syria and Iraq.

Several US news outlets reported US officials saying that Israel had launched a counterattack against Iran over last week’s attack.

“Of particular concern is the explosion in the city of Isfahan, which is located near several Iranian nuclear facilities. Iran earlier this week had warned Israel against attacking its nuclear sites, and might even reconsider building nuclear weapons in such a scenario,” Ibrahim said. (Try/Z-7)

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