Nur Afni Yunita, Muhammad Yusra, Rany Gesta Putri Rais, Sri Mulyati

External Factors on Composite Stock Price Index with Inflation as a Moderation

Introduction

External factors on composite stock price index with inflation as a moderation. Analyzes crude oil, gold, and DJIA Index effects on IHSG, moderated by inflation. Finds crude oil positive, gold negative, and DJIA no effect, with inflation moderating all.

Abstract

This study aims to determine the effect of crude oil prices, gold prices and the DJIA Index on the movement of the IHSG with inflation as a moderation. The study used 48 observation data with the MRA technique. The results of the study showed that crude oil prices had a positive effect, gold prices had a negative effect and the DJIA Index had no effect on the movement of the IHSG. Inflation was also able to moderate the effect of crude oil prices, gold prices and the DJIA Index on the movement of the IHSG

Review

This study investigates the influence of crude oil prices, gold prices, and the DJIA Index on the Composite Stock Price Index (IHSG), with inflation posited as a moderating variable. The research addresses a relevant and timely topic concerning the interplay of global economic indicators and domestic stock market performance, offering valuable insights into market dynamics in an emerging economy like Indonesia. The findings suggest a positive impact from crude oil prices, a negative effect from gold prices, and no significant direct effect from the DJIA Index on the IHSG. Crucially, the abstract highlights inflation's moderating role across all three external factors, indicating a more complex interaction than simple direct relationships. This provides a potentially important contribution to understanding the sensitivity of the IHSG to external shocks under varying inflationary environments. While the study's objective is clear and the chosen variables are pertinent to financial market analysis, several methodological aspects warrant further discussion. The abstract mentions using "48 observation data" and the MRA technique. The sample size of 48 observations is relatively small for analyzing financial time series data, which could raise concerns about the statistical power and generalizability of the findings. Furthermore, when employing MRA on time-series data, it is imperative to address issues such as stationarity, cointegration, autocorrelation, and heteroskedasticity to ensure the validity and reliability of the regression results. The absence of details on these crucial time-series considerations in the abstract makes it difficult to fully assess the robustness of the econometric approach. Additionally, while inflation is identified as a moderator, the abstract does not specify the *nature* of this moderation (e.g., does high inflation amplify or diminish the effects of these external factors?), which would provide deeper practical insights. Despite these considerations, the study offers valuable preliminary insights for investors, policymakers, and market analysts operating within the Indonesian context. The identified direct and moderated effects provide a basis for more informed investment strategies and risk management, particularly in periods of fluctuating inflation. Future research could enhance the study's impact by expanding the sample size to cover a longer period, employing advanced time-series econometric models (e.g., ARDL, GARCH-M, or panel data analysis if applied to multiple markets) that explicitly account for the characteristics of financial data. Exploring the specific direction and strength of inflation's moderating effect, as well as investigating other potential macroeconomic or geopolitical moderators, could further enrich the understanding of emerging market stock dynamics.

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