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Jakarta stocks dive after holiday break, triggering trading pause
Just before trading resumed after the holiday break, the local bourse adapted its circuit breaker rules, first introduced during the COVID-19 crisis, to better accommodate current volatility.
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A woman walks past a large screen displaying stock indices at the Indonesia Stock Exchange (IDX) in Jakarta on March 14, 2024. (AFP/Bay Ismoyo)
T
he Indonesia Stock Exchange (IDX) Composite index plunged 9.2 percent to 5,912 points shortly after opening at 9 a.m. on Tuesday, triggering an automatic 30-minute trading halt. By 10:30 a.m., the market had slightly rebounded to 5,971, narrowing the daily drop to 8.31 percent.
The sell-off did not come as a surprise to many analysts, given the recent steep decline seen in stock markets in the region and the world as investors are rattled by fears that escalating United States import tariffs could dampen global economic growth and squeeze corporate profits.
In the two days following the announcement by US President Donald Trump, US markets saw US$6.6 trillion in value wiped out. The Nasdaq tumbled 11.4 percent, the S&P 500 lost 10.5 percent, and the Dow Jones fell 9.3 percent.
However, some calm returned on Monday, with the Nasdaq inching up 0.1 percent, while the S&P 500 and Dow Jones posted smaller declines of 0.23 percent and 0.91 percent, respectively.
The ripple effect has been felt across Asia.
Following the announcement, Hong Kong’s Hang Seng Index nosedived 14.5 percent, Japan’s Nikkei 225 has shed 12.8 percent, and China’s Shanghai Composite has slipped 7.6 percent, with most of the damage occurring on Monday.
A mild recovery followed on Tuesday morning, with these indexes rising by 2 percent, 6.08 percent and 0.78 percent, respectively.
