Geopolitical concerns grew drastically across markets as US President Donald Trump had ordered the missile strike against a Syrian air base earlier on Friday (07/04). This base was the location where a deadly chemical weapon attack - against civilians - was conducted earlier. The US attack on Syria was the first US attack since the nation's civil war started in 2011.

Indonesian stocks snapped four sessions of gains (when it had touched various record highs along the way) due to these rising geopolitical tensions. However, there are more factors at play here. Firstly, Indonesian stocks are vulnerable to profit taking after the record high position on Thursday (06/04), especially after a Morgan Stanley report emphasized that valuations for Indonesian stocks have been rising sharply recently.

Secondly, investors are less enthusiastic to seek emerging market assets after the latest Federal Reserve minutes show that most policymakers want to see the US central bank start trimming its massive stimulus. Monetary tightening in the world's top economy tends to trigger capital outflows from the higher yielding, yet more risky, emerging market.

Thirdly, market participants are waiting for results of the much anticipated meeting between Trump and his Chinese counterpart Xi Jinping, the first meeting between the current leaders of the world's two most powerful economies. Both will discuss global, regional and bilateral issues of mutual concern. News about the meeting is expected to be released later on Friday (07/04).

Meanwhile, the rupiah appreciated 0.05 percent to IDR 13,321 per US dollar (Bloomberg Dollar Index). Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.11 percent to IDR 13,341 per US dollar on Friday (07/04).

Indonesian Rupiah versus US Dollar (JISDOR):

| Source: Bank Indonesia