| Summary: | Globalization processes that occur in the 21st century covering all aspects of
life, including economic globalization, and globalization in the financial field.
Successive financial crises in Asia, America, Middle East and Europe have a very
rapid contagion effect as one effect of globalization. Meanwhile, the crisis also led
some country to release the limitation of foreign investment, one of which is
Indonesia. This indicates that theoretically the Indonesian capital market is affected
by the capital markets in other countries. The purpose of this study is to analyze the
influence of stock market indices in different regions of the world to the composite
stock price index in Indonesian Stock Exchange using correlation and regression
methods. Research object is the index of the five stock markets in the world that the
author believes may affect the Indonesian Stock Exchange composite index, such as
stock index of the Dow Jones Industrial Average - DJI, London Stock Exchange -
FTSE 100, the composite index of the Tokyo Stock Exchange - Nikkei, Hang Seng
Index - HSI, Strait Technologies Index Singapore - STI. Based on this research, it
appears that not all the world stock market index has a considerable influence on
Indonesian Composite Index. Order of greatest influence is the Hang Seng, Straits
Times Index (STI), Dow Jones and FTSE London, while the Nikkei has a negative
correlation.
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