Indonesia’s stock market saw a dramatic downturn on Tuesday as trading resumed after a weeklong public holiday. The Jakarta Composite Index (JCI) nosedived over seven percent, triggering a temporary 30-minute suspension just moments after the opening bell.
This sharp fall reflects the growing anxiety among investors over escalating global tensions sparked by U.S. President Donald Trump’s sweeping tariffs.
The JCI initially plummeted 9.19%, shedding 598.56 points to land at 5,912.06 — marking its lowest level since June 2021. While the market stabilized somewhat after trading resumed, losses still stood at 7.82% as of 11 a.m. local time (0400 GMT), hovering just above the 6,000 threshold.
This sharp sell-off comes on the heels of a turbulent “Black Monday,” where global markets and oil prices suffered steep declines.
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The uncertainty triggered by Trump’s aggressive tariff moves — including an additional 32% levy on Indonesian goods, far higher than the general 10% applied to most countries — has added fuel to fears of a global recession.
The Indonesia Stock Exchange (IDX) had implemented safeguard measures ahead of the reopening, including circuit breakers designed to halt trading if the market dropped by 15%, with a full-day halt triggered at a 20% drop.
Additionally, any individual stock dropping more than 15% would be restricted from further sell orders below that price.
Economists point to investor jitters over a potential global trade war as a major cause of the sell-off. “The trading halt was a clear signal of the market’s deep concerns about the escalation of global risks,”— Josua Pardede, Chief Economist at Permata Bank
Meanwhile, Bank Indonesia moved swiftly to defend the rupiah, announcing it would intervene aggressively to stabilize the currency and reduce market volatility.
Despite these efforts, the rupiah still fell over 1% against the U.S. dollar in early spot market trading. The central bank revealed it had already stepped in on offshore markets ahead of the Tuesday reopening.
The rupiah has been under pressure for weeks, weighed down by concerns over President Prabowo Subianto’s economic leadership and the country’s long-term growth outlook.
Rather than retaliate, Prabowo’s government is opting for diplomacy. Officials plan to send a high-level delegation to Washington in hopes of easing tensions and protecting Indonesia’s trade interests.
This sharp correction in Indonesian equities highlights how deeply connected global markets are today. When major economies like the U.S. make aggressive policy moves, the ripple effects are felt far and wide — and developing markets often bear the brunt.
As Jakarta attempts to steady the ship, all eyes will be on both Washington’s next move and how Indonesia navigates the storm through strategic diplomacy and economic resilience.
AFP
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