The Jakarta Composite Index dropped 5%, snapping a two-day winning streak and setting off a 30-minute trading halt. The benchmark gauge soared 15% in two days through Friday, the best gain since 1999 as investors bet that various measures to prop up the global economy will help prevent further downside in financial markets. Asian stocks ended a four-day advance to decline 1.8% as of 10:31 a.m. Jakarta time.
Trading value was at 1.75 trillion rupiah ($107.23 million) before the halt, Laksono Widodo, director of trading and membership at the Indonesia Stock Exchange, said in a statement. This is the first trading halt since the Indonesia Stock Exchange implemented shorter operational schedule starting Monday.
Indonesia’s financial markets will continue to be punished by investors, following a 25 basis point interest rate cut recently, according to Anthony Kevin, economist at PT Mirae Asset Sekuritas. “In short, the government’s inability to inject large fiscal stimulus will make Indonesia’s economic outlook concerning, with U-shaped recovery instead of V-shaped,” Anthony said by text message on Monday.
Trading can be halted again for another 30 minutes if the index hits the 10% circuit breaker after market reopens, according to Indonesia Stock Exchange rules.
