(Bloomberg) -- Indonesian stocks snapped a two-day winning streak as investors remained wary about rising Covid-19 cases domestically and globally.
The Jakarta Composite Index fell 2.9% on Monday, taking the monthly decline to most since October 2008. The benchmark gauge hit a 5% circuit breaker earlier in the day, triggering the first trading halt since the Indonesia Stock Exchange implemented a shorter operational schedule that kicked in today.
Indonesian equities soared 15% in two days through Friday, the best such gain since 1999, as investors bet that various measures to prop up the global economy will help prevent a further collapse in financial markets. Asian stocks were set to end a four-day advance Monday.
The number of fatalities in Indonesia increased to 122 on Monday -- the most in Southeast Asia, with total confirmed cases at 1,414. Global death toll from the coronavirus pandemic surpassed 34,000 and a top scientist suggested that deaths in the U.S. may reach 200,000.
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Indonesia's financial markets will continue to be punished by investors, following a 25 basis point interest rate cut recently, according to Anthony Kevin, economist at PT Mirae Asset Sekuritas. “In short, the government's inability to inject large fiscal stimulus will make Indonesia's economic outlook concerning, with a U-shaped recovery instead of V-shaped,” Anthony said by text message on Monday.
“There are more downside risks than upside ones at this point,” said Michael Wilson Setjoadi, an analyst at RHB Research Institute Sdn Bhd. Rising number of confirmed Covid-19 cases will eventually force the government to impose a lockdown or regional quarantine, creating more negative sentiment in the market, said Setjoadi.
President Joko Widodo called for “more decisive steps” to restrict people's movements at a cabinet meeting on Monday, saying firm action is “needed to break the chain of distribution of coronavirus.”
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