The Jakarta Composite Index (JCI), the main gauge of the local stock exchange, tumbled 5 percent to 4,895, a level unseen in almost four years, bringing the year-to-date (ytd) decline of the index to more than 21 percent. The drop makes for a bear market, which is defined by a drop in share prices of more than 20 percent from a recent high.

“Stocks have been halted for 30 minutes, but because this has occurred 30 minutes prior to the close of trading, trading is technically closed now. Today has closed; it’s all done,” said Fakhri Hilmi, deputy commissioner for capital market supervision at the Financial Services Authority (OJK).

The bourse halts stock trading for 30 minutes if its main gauge falls more than 5 percent. If the index falls more than 10 percent after the first suspension is lifted, the bourse will halt trading for another 30 minutes, according to a new IDX policy issued on Tuesday in light of the market rout.

Trading will be stopped for the whole session if the JCI continues to fall further than 15 percent. The suspension can last for more than one day with the approval or instruction of the Financial Services Authority (OJK).

Employees pass near the screen of stock movements in the Indonesia Stock Exchange building, Jakarta, Monday (2/3/2019). (Antara/Galih Pradipta)

The decline follows an already steep Asian stock market drop. Japan tumbled 4.4 percent, a three-year low level, Australia nosedived to three-year low 7.4 percent, Seoul fell 4.8 percent to 4.5-year low. The MSCI’s broadest index of Asia-Pacific shares outside Japan fell 4.7 percent.

Euro Stoxx 50 futures plunged 8.3 percent to their lowest levels since mid 2016, following the US’ S&P 500 4.89 percent fall, nearing bear market territory. The Dow Jones yesterday plunged 5.9 percent to 23,553 on Wednesday, marking a bear market.

“Emotional factors still dominate for the time being,” CSA Institute analyst Aria Santoso said on Feb. 29, just as the stock market began volatile movements. “The government stimulus program takes time for investors to comprehend as worries and panic continue to cloud the market and investors do not think logically.”

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The government unveiled a Rp 10.3 trillion (US$717.87 million) fiscal stimulus package to support the tourism industry and boost consumer spending to counter the economic impact of the coronavirus outbreak. A second stimulus package is underway.

Bank Indonesia has recorded a foreign outflow of about Rp 31.76 trillion (US$2.19 billion) worth of government bonds and Rp 4.87 trillion worth of stocks so far this year as foreign investors flock to safe-haven assets such as the United States’ 10-year Treasury Note.