The selling spree continued on the Indonesia Stock Exchange on Tuesday as big investors pulled out from the market amid fears that the escalation of the trade war between the United States and China would further harm the world economy.

The Jakarta Composite Index (JCI) plunged 1.2 percent in morning trade as the withdrawal of foreign funds in regional markets also hit the local exchange. Despite a number of blue chip shares gaining in the afternoon session, the index lost 1.05 percent during the day to close at 6,071.20.

The rupiah was also under pressure amid the selling spree on the stock market. The Indonesian currency further weakened to 14,430 per US dollar.

Based on Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (JISDOR) reference rate, the rupiah fell to 14,444 per US dollar from 14,362 per US dollar the previous day.

Analysts said that in addition to the negative sentiment resulting from the prospect of the slower global economic growth, investors in the Indonesian stock market were also worried about the projected increase in the country’s trade deficit in the next few months

World stocks hovered near two-month lows on Tuesday, although slightly more optimistic comments from US and Chinese officials on trade brought some comfort a day after equities suffered their worst sell-off so far this year.

Fears the US and China are spiraling into a fiercer, more protracted trade dispute that could derail the global economy has rattled share markets in recent weeks, and the sell-off accelerated on Monday after China announced plans for retaliatory tariffs, Reuters reported.

But the Chinese government’s top diplomat said China and the US both had the “ability and wisdom” to reach a trade deal that was good for both. And US President Donald Trump said he was optimistic about resolving the trade dispute.

Asian shares took another beating on Tuesday but closed off their lows, following the more upbeat tone from US and Chinese officials.

Japan’s Nikkei stock index fell to its lowest since mid-February, while broader Asian markets were dragged down by a sell-off in Chinese shares.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell over 1 percent to its lowest level since Jan 30, leaving MSCI’s world equity index stuck near its lowest levels in around two months.

Prakash Sakpal, Asia economist at ING in Singapore, said the current volatility showed how a “180-degree” turn in US rhetoric on trade negotiations had spooked markets.

“We don’t see any quick end to this state of the markets until we see some resolution, constructive dialogue and something very solid in terms of deals. But the hopes for that are a bit misplaced currently,” he told Reuters.

The sharp drop in the JCI was largely caused by the fall in blue chip shares. Among other big losers were marine and fisheries firm PT Inti Agri Resources, telecommunications firm PT Smarfren Telecom, telecommications tower operator PT Tower Bersama Infrastructure, Bank Tabungan Pensiunan Nasional Syariah and PT Barito Pacific.

Royal Investium Sekuritas analyst Janson Nasrial said the decline in the stock prices of those firms was caused by worries over the escalation of the trade war. “The trade war sentiment also impacted second liner stocks like those five,” he said.

Although many blue chip stocks fell sharply due to selling pressure from foreign invesors, some big cap shares such as Bank Central Asia, for example, recorded a total of Rp 268.4 billion ($18.62 million) in net foreign sales, followed by PT Astra International with Rp 145.1 billion in net foreign sales.

William of Panin Sekuritas, however, said the sell-off was a continuation from the past week but the most transactions were carried out today.

Despite the trade war concerns, he predicted the JCI would rebound around the range of 6,010 to 6,120 on Wednesday.

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