Indonesian Stock Fall prompts Trading halt due to Economic Woes
Indonesian equities fell to the lowest in almost a decade on March 18, causing a trading suspension for the first time since the outbreak, as fears about a weaker economy and lower consumer spending damaged the market mood.
The Jakarta Composite Index fell 7.1%, the most extraordinary intraday drop since September 2011. The most significant point drags were PT DCI Indonesia, a supplier of data center services, and PT Bank Rakyat Indonesia, with the former down by 20%. The market halted for 30 minutes after going below 5% for the first time since late 2020.
The JCI gauge continued its drop after the pause was lifted. Hitting the next important barrier – a 10% decline – might result in another suspension. The rupiah fell 0.3% versus the dollar. This year, the currency performed the poorest in Asia. Concerns regarding the development prospects for Southeast Asia’s largest economy have grown due to President Prabowo Subianto’s recent instructions to reallocate cash to priority projects. The country suffered an unusual budget deficit early this year, with public income falling more than 20% yearly. Mr Mohit Mirpuri, fund manager at SGMC Capital, attributed the March 18 rout to position unwinding and forced liquidations, particularly by margin traders. “Sentiment is still weak, and no fresh inflows to support the market ahead of the long break.”
The fall hastens the decline in Indonesian stocks, solidifying their status as among the world’s worst performers this year. A stronger dollar and rising trade tensions have caused an investor exodus, with foreign funds withdrawing around US$1.65 billion (S$2.2 billion) of local equities on a net basis in 2025. All eyes are now focused on Bank Indonesia’s rate decision on March 19, as investors anticipate a potential intervention to stabilize the currency and support GDP.
