Islamic Stock Market Efficiency: Volatility and Performance Analysis Amid Global Economic Uncertainty

Abstract

The efficiency of the Islamic stock market is pivotal amid global economic uncertainties, serving as a resilient alternative to conventional markets through adherence to sharia principles. This study aims to analyze the efficiency, volatility, and performance of the Indonesian Islamic stock market (Jakarta Islamic Index/JII) over a five-year period (2019–2024), reflecting global economic challenges. Using a quantitative approach, this research employs volatility and performance analysis models with data drawn from financial reports and macroeconomic indicators. Findings reveal that while the Islamic stock market in Indonesia experiences increased volatility during economic crises, it demonstrates superior stability and competitive returns compared to conventional markets. These results underscore the role of sharia principles in mitigating speculative risks and enhancing market resilience. Implications of this study suggest that policymakers, investors, and regulators can leverage the insights to develop strategies for risk management and investment optimization within the Islamic capital market ecosystem. Enhanced financial literacy and technological innovations are recommended to bolster transparency and efficiency, ensuring sustainability in the global economic landscape.