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Wuhan coronavirus to affect local stock market until outbreak contained
The main gauge of the Indonesia Stock Exchange, the Jakarta Composite Index, declined 0.36 percent on Tuesday to 6,111.18.
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Visitors take pictures of the Indonesia Stock Exchange's trading board in Jakarta on Dec. 30, 2019. (JP/Dhoni Setiawan)
N
egative sentiments stemming from China’s coronavirus outbreak are to continue infecting the local stock market for some time until global authorities manage to contain the spread of the deadly virus as investors flee to save haven assets, analysts are saying.
The main gauge of the Indonesia Stock Exchange (IDX), the Jakarta Composite Index, declined 0.36 percent on Tuesday to 6,111.18 after falling as much as 1.78 percent on Monday as global jitters over the spreading virus reached the local bourse.
Foreign investors recorded almost Rp 470 billion (US$34.54 million) of net sell on Tuesday with stocks of diversified petrochemical giant PT Barito Pacific, privately owned Bank Central Asia (BCA) and state-owned Bank Rakyat Indonesia (BRI) becoming the index’s laggards.
On the day, Japan’s benchmark index, the Nikkei 225, fell 0.5 percent after plunging more than 2 percent in the previous trading session, while the broader Topix index dropped 0.6 percent. China’s Shanghai and Hong Kong stock markets were closed for public holidays.
“There is a growing concern that the virus outbreak will last for a long time,” BNI Sekuritas' head of equity research, Kim Kwie Sjamsudin, told The Jakarta Post on Monday, adding that the outbreak would likely continue to adversely affect the local stock market until the virus could be contained or new vaccines developed by the medical authorities.
"It will be hard to predict how long the index correction will happen because the level of uncertainty is still high,” he said.
While no positive case has yet been found in Indonesia, the 2019-nCoV virus had infected more than 4,600 people in various countries as of Tuesday afternoon with 106 fatalities on mainland China. The outbreak fueled concerns about the Chinese economy, the second largest in the world, which had already weakened in the last few years because of trade frictions with the United States.
