THE IMPACT OF MACRO ECONOMIC VARIABLE TOWARD INDONESIA COMPOSITE STOCK PRICE INDEX

Abstract

The Composite Stock Price Index is a reflection of the performance of the Indonesia Stock Exchange, when the composite stock price index showing an increase means that the Indonesian economy is in a conducive condition and otherwise. To be able to find out what factors can affect the composite stock price index movement, it is necessary to pay attention to several factors such as interest rates, inflation, exchange rates and global exchanges such as the Dow Jones Index. This study aims to determine the effect of Inflation, Interest Rates, Exchange Rates, and the Dow Jones Index on The Composite Stock Price Index (CSPI) listed on the Indonesia Stock Exchange. The population of this study is all monthly data on the Composite Stock Price Index, Inflation, Interest Rates, Exchange Rates, and the Dow Jones Index for the period January 2016 "“ December 2020 with the number of observations being 60 months using the saturated sample technique. The analytical method used in this research is multiple linear regression analysis method.

The results of this study indicate that Inflation, Interest Rates, Exchange Rates, and the Dow Jones Index simultaneously have a significant effect on the CSPI on the Indonesia Stock Exchange. The results of the partial test show that Inflation, Interest Rates, and the Dow Jones Index each have a positive and significant effect on the CSPI. While the Exchange Rate has a negative and significant effect on the CSPI. The results of this study can be used as implications for investors and potential investors. Investors can consider the current conditions by considering macroeconomic variables that can affect the CSPI in making investment decisions.

Keywords: Inflation, Interest Rates, Exchange Rates, Dow Jones Index, Composite Stock Price Index