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Bleak economic outlook casts shadow over Indonesian stock market

The Jakarta Composite Index (JCI), the main gauge of the Indonesia Stock Exchange (IDX), has been in the red for the past 13 days.

Riska Rahman (The Jakarta Post)
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Jakarta
Wed, October 9, 2019

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Bleak economic outlook casts shadow over Indonesian stock market Traders work after the opening bell at the New York Stock Exchange (NYSE) on Tuesday in New York City, United States. Indonesian stocks have continued to fall this week amid growing fears of a global recession (AFP/Johannes Eisele)

G

rowing concern about a possible global recession continues to cast a shadow over the Indonesian stock market with most blue-chip stocks under persistent pressure in the past two weeks amid a lack of appetite among both local and foreign investors.

The Jakarta Composite Index (JCI), the main gauge of the Indonesia Stock Exchange (IDX), has been in the red for the past 13 days. The index fell 3.5 percent to 6,023 at the close of afternoon trading on Wednesday from 6,230 on Sept. 26. The index has fallen by 2.76 percent year-to-date (ytd).

Like in other stock markets, the majority of Indonesian stocks lost ground as weak economic data in Europe and other developed countries fueled fears of a global recession, analysts said.

MNC Sekuritas’ head of research Thendra Chrisnanda said on Tuesday that growing concerns over the global economy and the lack of recovery in the country’s stagnant economy had put pressure on stock prices in the local market.

Most share prices fell, as investors sidelined the market amid growing fears the economic slowdown would lead to a global recession, he said.

World Bank president David Malpass said the global economic outlook was deteriorating amid Brexit-related uncertainty, trade tensions and a downturn in Europe.

“Global growth is slowing,” Malpass said, as reported by Bloomberg from Montreal, Canada, on Monday in a speech ahead of the IMF and World Bank annual meetings. The world economy now looks even weaker than the bank’s June forecast of 2.6 percent growth in 2019, as it had been “hurt by Brexit, Europe’s recession and trade uncertainty,” he added.

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