THE INFLUENCE OF DJIA, BRENT CRUDE OIL PRICES, AND HSI ON THE INDONESIA COMPOSITE INDEX

Abstract

The integration of global financial markets has increased the influence of international indicators on domestic stock markets. This study analyzes the effect of the Dow Jones Industrial Average (DJIA), Brent Crude Oil Price (BCOP), and Hang Seng Index (HSI) on the Indonesia Composite Index (IHSG) during January 2020–December 2024. A quantitative approach is used with monthly secondary data and analyzed using the Error Correction Model (ECM) to capture both short-run and long-run relationships. The results show that in the long run, DJIA and BCOP have a positive and significant effect on IHSG, while HSI has a negative and significant effect. In the short run, DJIA and BCOP remain significant, whereas HSI is not significant. The Error Correction Term (ECT) is significant, indicating long-run equilibrium. These findings highlight the importance of global financial indicators in influencing IHSG movements and provide insights for investors and policymakers.