The Indonesian Sharia Capital Market in Shock Covid-19: Global Market Interaction

Abstract

Covid-19 has caused problems, including the global Islamic capital market. The rapid and extraordinary development of Covid-19 has rocked sharia investment in Indonesia. This study looks at the interaction of the global Islamic stock market with the Indonesian Islamic stock market, namely the Jakarta Islamic Index (JII), in the Covid-19 shock. Data is collected from within the global Islamic capital market sourced from the Dow Jones Islamic Market World Index, and the Indonesian Islamic capital market is sourced from the Indonesia Stock Exchange (IDX). They are generalizing the research period carried out during the covid-19 period starting from March 2020 to November 2022. This research used several stages of the Cointegration Test, Granger Causality Test, IRF (Impulse Response Function) Test and Forecasting Error Variance Decomposition (FEVD) Test. The study results show that the global Islamic stock market has had a significant impact on the Indonesian Islamic stock market both in the short and long term in the era of the covid-19 shock.