Economic concerns weigh on market sentiment, Indonesia's stock market plummets 5%, triggering trading halt

On March 18, the Indonesian stock market plummeted on Tuesday, leading to a trading halt due to concerns over economic weakness and sluggish consumer spending ahead of Eid al-Fitr, which dampened market sentiment. The Jakarta Composite Index fell by as much as 5% during the day, marking the largest drop since September 10, 2020, triggering a trading halt. Trading has now resumed, with the Jakarta Composite Index's decline expanding to 6%. Nigel Peh, portfolio manager at Timefolio Asset Management, stated that there are concerns about consumer companies and weak sales leading into Eid, "many locals have cut back on discretionary spending." Meanwhile, weak household spending and deflationary data have also weighed on market sentiment. The sell-off on Tuesday accelerated the decline of the Indonesian stock market, solidifying its position as one of the worst-performing markets globally this year. A stronger dollar and escalating trade tensions have led to an outflow of investors. Everyone is currently focused on the Indonesian central bank's interest rate decision on Wednesday, with investors awaiting possible interventions by the central bank to stabilize the rupiah and boost economic growth.