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Jakarta Post

JCI plunges amid imminent Trump victory

  • Prima Wirayani

    The Jakarta Post

Jakarta   /   Wed, November 9, 2016   /  12:47 pm
JCI plunges amid imminent Trump victory Signs of panic: ‚ÄčA man passes the iconic round table on the trading floor of the Indonesia Stock Exchange (IDX). Panicked traders around the globe are rushing to unwind bets they piled into over the last two days after predictions that Hillary Clinton would sweep to an easy victory in the US presidential election have been proven wrong. (thejakartapost.com/Wienda Parwitasari)

The Jakarta Composite Index (JCI), the benchmark of the Indonesia Stock Exchange (IDX), fell by more than 2 percent as of the end of the first trading session on Wednesday amid a jittery global market in response to the anticipated victory of Republican Party candidate Donald Trump in the US presidential election. 

The index, gaining the most of its value compared with its peers so far this year, ended the first session at 5,358, down 2.06 percent from Tuesday’s close. 

The mining sector hurt the most as it fell 2.8 percent during the session, followed by infrastructure and miscellaneous industry, according to IDX data. 

The rupiah’s value against the US dollar fell 1.27 percent to Rp 13,250 per dollar, a level unseen since July. 

Panicked traders rushed on Wednesday to unwind bets they piled into over the last two days amid predictions that Democratic Party's Hillary Clinton would sweep to an easy victory in the election, Bloomberg reported. 

Futures on the S&P 500 plunged more than 4 percent, while Mexico’s peso -- a barometer for investors’ perceptions of the American vote -- sank by the most in eight years. Safe-haven demand pushed the yen and gold up by more than 2 percent. Yields on 10-year treasuries slid to a two-week low.

During his campaign, Trump strongly highlighted his protectionist stance, pledging to withdraw the US from global trade alliances, including by quitting the North American Free Trade Agreement if it is not renegotiated and killing the Trans-Pacific Partnership trade deal.

Alvin Liew, a senior economist at United Overseas Bank Ltd. in Singapore, said a Trump win would likely create immediate uncertainty in financial markets, in particular put equity markets under pressure. He also predicted there would likely be a rush into safe-haven assets, US treasury bonds, gold, Japanese yen and the Swiss franc.

“Questions will also center on the appointments of key roles, such as the chiefs of defense, treasury and chair of the Federal Reserve [in 2018],” he said in a message sent to The Jakarta Post.

Bahana Securities research head Harry Su, meanwhile, shared a more optimistic view, as he believes many of Trump’s policies will be “too difficult to implement”.

“Yes, the market will fall and is falling, but the stock market will rebound with trading opportunities abound,” he said. (hwa, est)

 

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