The Jakarta Post
Indonesian stocks continued their steep fall on Tuesday morning, crashing to a level unseen since January 2016, following Dow Jones’ worst decline since 1987’s Black Monday.
The Jakarta Composite Index (JCI) slipped 0.33 percent upon opening to 4,675.34 as foreign investors dumped Rp 5.53 billion (US$365,658) worth of Indonesian stocks. As of 10:04 a.m. in Jakarta, the main gauge widened its loss and fell 4.09 percent, moving closer to the Indonesia Stock Exchange (IDX) circuit breaker limit of a 5 percent fall.
Forty-eight stocks started the session in the red with animal feed producer PT Charoen Pokphand Indonesia recording the steepest decline of 6.86 percent, nearly hitting the auto rejection limit of a 7 percent decline in prices.
The infrastructure sector led the plunge as it nosedived 5.14 percent, followed by the basic industry that fell 3.59 percent and consumer sector that slid 3.22 percent.
The rupiah, in the meantime, depreciated further on Tuesday as it fell 0.55 percent against the greenback to Rp 15,015 per dollar, breaking the psychological level of Rp 15,000 for the first time since October 2018, Bloomberg data shows.
“The increasing number of COVID-19 cases globally has raised concerns among investors despite the Fed’s rate cut and injection to the financial market,” Indonesia Equity Analyst Association (AAEI) Edwin Sebayang wrote in a research note on Tuesday, projecting the index to move around 4,456 to 4,731 in the day.
Wall Street suffered its biggest drop since the crash of 1987 on Monday following unprecedented steps taken by the Federal Reserve, United States lawmakers and the White House to slow the spread and blunt the economic hit of the coronavirus failed to restore order to markets. The Fed cut rates to a target range of zero to 0.25 percent and said it would expand its balance sheet by at least $700 billion in the coming weeks.
The investors’ panic triggered another circuit breaker in Wall Street’s three main stock indexes for 15 minutes shortly after the open as the S&P 500 index fell 8 percent, Reuters reported.
On Tuesday morning, Asian markets were also deep in the red. Tokyo slid 2.79 percent, Seoul was down 3.2 percent, Singapore slipped 0.92 percent, Shanghai lost 0.55 percent, while Hong Kong gained 0.1 percent.
"Market conditions are highly volatile and there is still great potential for the index to continue weakening," Artha Sekuritas analyst Dennies Christopher said. He said he was not advising investors to buy stocks during the continued stock market rout.