Jurnal Ekonomi dan Bisnis Jagaditha Volume 5, Nomor 2, 2018, pp. 109-118 EISSN 2579-8162 ISSN 2355-4150 https://ejournal.warmadewa.ac.id/index.php/jagaditha The Effect of Commodity Price on Indonesia Rupiah Exchange Rate and Dow Jones Index on Indonesia Stock Exchange Siti Hernita Oktavia*, Anis Rachma Utary and Felisitas Defung Magister of Management Program, Economic and Business Faculty, Universitas Mulawarman, Samarinda, Kalimantan Timur, Indonesia *sitihernitaoktavia@ymail.com Received: 12/06/2018 Revised: 10/07/2018 Published: 30/09/2018 How to cite (in APA style): Oktavia, S, H., Utary, A, R., & Defung, F. (2018). The Effect of Commodity Price on Indonesia Rupiah Exchange Rate and Dow Jones Index on Indonesia Stock Exchange. Jurnal Ekonomi dan Bisnis Jagaditha, 5(2), 109-118. http:// dx.doi.org/10.22225/jj.5.2.809.109-118 Abstract Capital market is one of today's economic instruments that has developed very rapidly. One way to measure the performance of capital market is through stock index. There are many affecting factors to the stock index, such as domestic interest rates, foreign exchange rates, international economic conditions, the country's economic cycle, inflation rates, tax regulations, the amount of money in circulation (M. Samsul, 2008). The purpose of this study is to analyze the effect of Oil Prices, World Gold Prices, Exchange Rate of Indonesian Rupiah, and Dow Jones on IHSG (Indonesia Stock Exchange). We used analytical method with multiple regression analysis performed with SPSS 24 to conduct the study. In advance to applying multiple regression analysis, we administered a classic assumption test. This is necessary to make the regression equation is BLUE (Best, Linear, Unbiased, Estimator). Results of data analysis showed that Gold Price and Indonesia Rupiah Exchange rate negatively affected the Indonesia Stock Exchange; the Oil Prices and Dow Jones index also had a positive effect on Indonesia Stock Exchange. The value of adjusted R square is 59.7%. This means that by 59.7% Indonesia Stock Exchange movement can be predicted from the movement of the independent variables. Keywords: Commodity Price; Dow Jones Index; Indonesia Stock Exchange; Indonesia Rupiah. INTRODUCTION Capital markets have an important role in the economy, especially in the allocation of public funds. According to (Jogiyanto, 2010), the capital market is a means companies use to increase their long term needs by selling shares or issuing bonds. Investment is the activity of investing directly or indirectly in the hope that in time the capital owners will get a number of benefits from the investment (Samsul, 2008). Investors, through the capital market can choose the object of investment with different levels of return and risk level faced, issuers through the capital market can collect long- term funds to support business continuity. One of the investment activities that can be selected by investors is to invest in the capital market. In Indonesia, investors who are interested in investing in the capital market can invest in the Indonesia Stock Exchange (IDX). The housing market features distinctive search friction due to heterogeneity in house characteristics and consumer tastes (Gan, Wang, & Zhang, 2018). One index that investors often pay attention to when investing in the Indonesia Stock Exchange is the Composite Stock Price Index (CSPI). Through the movement of the CSPI, an investor can see whether the market conditions are conducively accurate. There will be differences in market condition and the differences would require different strategies from investors in doing investment. Many factors can influence the Stock Exchange, including changes in central bank interest rates, global economic conditions, the level of world energy commodities prices, political Copyright © 2018 Jurnal Ekonomi dan Bisnis Jagaditha EISSN 2579-8162 Page 109