JAKARTA: Indonesian stocks closed down nearly eight percent on Tuesday after a weeklong public holiday break, its biggest fall in more than a decade as uncertainty over US President Donald Trump’s global tariffs roil markets.

Trump upended the world economy last week with sweeping tariffs that have raised fears of an international recession and triggered criticism even from within his own Republican Party. The benchmark Jakarta Composite Index closed down 7.9 percent at 5,996.14, its lowest level since June 2021 as markets reopened following a closure since March 28 because of public holidays. The fall was its biggest since 2011, Bloomberg reported.

In the opening session, stocks sharply fell more than nine percent, sparking a brief trade suspension, but it would recoup some of those losses. Ahead of the opening, Indonesia’s stock exchange said trading would be further suspended if the market fell 15 percent, and trading would be halted for the day if the market dropped 20 percent “to ensure orderly, fair and efficient securities trading”.

The stock exchange also said if an individual share fell by 15 percent, any sell orders below that price would be turned down. Analysts said the sell-off reflected investor fears of a wider global trade war.

“The trading halt... was a strong signal of the market’s deep concerns about the escalation of global risks,” Permata Bank chief economist Josua Pardede told AFP.

The Indonesian central bank said Monday it would “intervene aggressively” to support the suffering rupiah. The currency was down more than one percent on Tuesday against the dollar, according to spot markets. The central bank said it had already intervened in the offshore rupiah market ahead of the reopening. The rupiah was already punished last month as confidence waned in President Prabowo Subianto’s handling of the economy and fears over the country’s growth prospects.

Trump set an additional rate of 32 percent on goods from Indonesia, higher than the baseline 10 percent for all countries hit with levies. Prabowo has said Jakarta will pursue diplomacy by sending a high-level delegation to the United States, instead of retaliating to the tariffs. 

Indonesia’s chief economic minister Airlangga Hartarto said Tuesday that Jakarta would buy more products from the United States to narrow its trade surplus with Washington, including wheat, liquefied natural gas and liquefied petroleum gas. Jakarta enjoyed a $16.8 billion trade surplus with Washington last year, according to Indonesian government data. – AFP