Riska Rahman, Jakarta – Indonesian stocks jumped by more than 3 percent on Tuesday morning, reversing deep losses in recent days due to the spread of COVID-19, as market players regain confidence following authorities' efforts to calm the market down.
The Jakarta Composite Index (JCI), the main gauge of the Indonesia Stock Exchange (IDX), soared 1.31 percent to 5,431.30 when Tuesday's session was opened. The uptrend then continued as the index climbed to 3.09 percent to 5,527.2 at 11:52 p.m. Jakarta time.
The benchmark index ended Monday with a deep correction of 1.68 percent, sending it to its lowest level since February 2017. Over the last week, the benchmark stock index has fallen 7.3 percent.
"The market players seem to have calmed themselves down from their self-induced panic last week," Jasa Utama Capital equity analyst Chris Apriliony told The Jakarta Post. "That's why the JCI rebounded really high."
The government and the central bank's effort to maintain the rupiah's stability and the Financial Services Authority (OJK) and the IDX measures and proposed policies to anchor the stocks helped the index bounce back, he added.
Bank Indonesia (BI) announced five measures to stabilize the rupiah on Monday while the bourse halted short-selling transactions to prevent the stock market from falling deeper after President Joko "Jokowi" Widodo announced Indonesia's first two confirmed cases of COVID-19.
The OJK previously said to allow companies to buy back their shares without approval from a shareholders meeting.
The JCI's bullish movement on Tuesday morning was in line with regional stock market indices. Tokyo increased 0.2 percent, Shanghai jumped 1.36 percent, Hong Kong strengthened by 0.69 percent and Seoul soared 1.83 percent.
The consumer sector index led the JCI strengthening on Tuesday morning, recording a jump of 3.54 percent as share prices of consumer stocks at pharmaceutical firm PT Kimia Farma and food manufacturing giant PT Indofood Sukses Makmur jumped 9.8 percent and 6.4 percent respectively.
Chris said one of the reasons for the sector index's jump was the public's panic buying on Monday, causing food products and supplies to fly off the supermarket shelves.
"However, if we look closely, the share prices of several consumer goods stocks have become very cheap due to the rout and prompted investors to buy more of the stocks," he said.