Geopolitical Risk, Commodity Prices, and Islamic Stock Index Performance: The Role of Macroeconomic Factors
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This study analyzes the influence of geopolitical risk, oil prices, and gold prices on the performance of Islamic stock indices and examines the role of exchange rates and inflation as moderating variables. Monthly data from the Dow Jones Islamic Market (DJIM) during the conflict in Ukraine and the Middle East between February 2022 and October 2024 were analyzed using Moderated Regression Analysis (MRA) with STATA. The results show that geopolitical risk, oil prices, and gold prices have a negative and significant effect on the DJIM. The exchange rate significantly moderates the relationship between gold prices and the DJIM, while moderation in the relationship between oil prices is only significant at the 10% level. Inflation does not moderate either relationship. Practically, these findings emphasize the importance of considering global risks, commodities, and foreign exchange conditions in Islamic stock portfolio management and Islamic financial market stability policies.
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