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Indonesian stocks plunge after Wall Street free fall

Jakarta Post - June 12, 2020

Jakarta – Indonesian stocks plunged deep in the red on Friday morning following a market rout seen by Wall Street in Thursday's session as investors grew wary of a second wave of the coronavirus pandemic in the United States.

The Jakarta Composite Index (JCI), the main gauge of the Indonesia Stock Exchange (IDX), plummeted 2.54 percent to 4,731.54 as trading started. It had pared some of its losses to 1.2 percent as of 10:26 a.m. Jakarta time.

"We note that the Dow [Jones Industrial Average] plunged more than 1,800 points yesterday as investors grew concerned about the spike in COVID-19 cases in some [US] states as lockdown eases," Mirae Asset Sekuritas Indonesia analyst Andy Wibowo Gunawan wrote in a research note on Friday.

"We are less optimistic the JCI will trade higher for today due to the negative sentiment from Wall Street," he added.

The Dow Jones crashed 6.9 percent on Thursday while the S&P 500 lost 5.89 percent and the Nasdaq Composite fell 5.27 percent as spiking coronavirus cases in several US states helped spur the worst sell-off since March amid worries over excess valuations and another massive number of US jobless claims, AFP reported.

After weeks of focusing on the positive side of the reopening of economies, investors shifted attention to rising coronavirus cases in some states that have reopened, including the US states of Texas and Arizona.

On Friday morning, Tokyo dropped 1.52 percent, Hong Kong declined 1.38 percent while Shanghai and Singapore fell 0.31 percent and 1.66 percent, respectively.

As many as 2994 stocks traded on the IDX fell in the red, 90 managed to hover in positive territory while 110 stock prices were unchanged. Energy company PT Medco Energi International, pharmaceutical company PT Kalbe Farma and state-owned construction company PT Wijaya Karya were among the stocks that suffered as they fell more than 2 percent.

Foreign investors sold around Rp 311 billion (US$21.8 million) worth of stocks more than they bought on Friday morning.

"We project the JCI to hover around 4,650 to 4,800 today," Kresna Sekuritas wrote in its note. (prm)

Source: https://www.thejakartapost.com/news/2020/06/12/indonesian-stocks-plunge-after-wall-street-free-fall.html