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IDX to face rocky start after long holiday as tariff fears grip investors
Technically insulated from the recent rout due to its holiday closure, Indonesia’s stock market will hardly escape unscathed and is likely to take a delayed hit following the sharp sell-offs on other Asian exchanges when it reopens for trade on Tuesday.
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Pedestrians walk past a sign showing the Hang Seng stock market index in Hong Kong, China, on Sept. 27, 2024. (AFP/Peter Parks)
T
he Indonesia Stock Exchange (IDX) is bracing for a turbulent reopening after an 11-day break for the Nyepi and Idul Fitri holidays, with investors rattled by fears that sweeping United States import tariffs could dampen global economic growth and squeeze corporate profits.
Around US$6.6 trillion in US stock value evaporated within just two days following US President Donald Trump’s announcement of import tariffs on all countries, aimed at narrowing US trade deficits and boosting domestic jobs.
The S&P 500 and Dow Jones indexes fell by 10.5 percent and 9.3 percent, respectively, in the aftermath.
The sell-off has spilled over into Asia. On Monday, Hong Kong’s Hang Seng plunged 13.2 percent, Japan’s Nikkei 225 dropped 7.8 percent and China’s Shanghai Composite slid 7.3 percent. Since the tariffs were unveiled, these indexes have fallen by 14.5 percent, 12.8 percent and 7.6 percent, respectively.
Starting on April 5, the US imposed a general 10 percent baseline tariff on imports into the country. A second wave of tariffs is set to kick in just four days later, targeting countries with large surpluses in bilateral trade with the US.
Indonesia, which enjoyed a $16.8 billion trade surplus with the US last year, finds itself on a list of dozens of countries subjected to elevated rates under what the White House calls the “reciprocal” measure, with a 32 percent import tariff.
This rate is lower than Vietnam’s 46 percent and Thailand’s 36 percent, but higher than Malaysia’s 24 percent, the Philippines’ 17 percent and Singapore’s 10 percent.
