The Jakarta Stock Exchange Composite Index (JCI) on Wednesday (9/9) trading closed down almost 2% or to be precise 1.81% at the level of 5,149.37. This was triggered by global sentiment, namely being dragged down by profit-taking on US stock exchanges which also aggravated Asian Stock Exchange and negative sentiment on problematic vaccine trials. The disaster was yet to come, as only after the market closed on the following day, the JCI Index fell by a whopping 5%. The catastrophe was primarily caused by the sudden news delivered by the Governor of Jakarta, Anies Baswedan, in regards to the possibility of an ensuing lockdown this coming Monday. Although fortunately as of today, the index was able to climb back into the 5.000 regions (precisely 5.016, up 2,56%) during the market close. Amidst these volatile times, foreign investors took the net selling action of Rp591 billion in the regular market today with a transaction value of Rp7.4 trillion. Domestically, BI reports that retail sales as reflected by the Retail Sales Index (IPR) contracted 12.3% in July 2020 compared to the same period the previous year. The good news is that the contraction in retail sales continues to decline. Since touching the 'crust of hell' in May 2020, the rate of decline in IPR has gradually dwindled.
Bank Indonesia also recorded Indonesia's Consumer Confidence Index (CCI) in August to rise minimally for 0.7 points from the previous month's level of 86.9. This stated data become one of the incentives for JCI's poor performance, as the number still shows that Indonesian consumers are still pessimistic about the nation's economic stability and conditions. The consumer confidence figure mainly results from various government's support and stimuli during these challenging times, such as subsidized salaries for workers and zero percent credit assistance for Micro, Small, and Medium Enterprises (MSMEs). The fact that the consumer confidence figure has increased insignificantly, Bhima Yudhistira -- an economist at the Institute for Development of Economics and Finance, responded by stating, "Overall, we still have to wait for the COVID-19 curve to the slope, only then there will be a significant increase in the consumer confidence number,". This data also represents sluggish retail sales, confirming that domestic household consumption is uncertain. Apart from that, another sentiment was also brought by the implementation of the large-scale social restrictions for the second time starting September 14 by Jakarta Provincial Government, as the number of cases has not declined over time. Director of PT Mega Anugerah Investama, Hans Kwee, said that with this policy in the third quarter (Q3) of 2020, it is inevitable that the Indonesian economy will experience contraction and the state's capital market will respond with corrections.
In addition, other than Indonesia's stock market, stock exchanges across Asia were closed in the red in Wednesday (9/8) as the Wall Street closed, trading data has shown the Nikkei index corrected by 1.04%, followed by the SSE index in China fell by 1.86%, and the Singapore STI index also slumped for 0.22%. Meanwhile, Hong Kong Hang Seng depreciated by 0.63%, and South Korea's Kospi index declined by 1.09%. From Asia's sentiment, on (9/9), China has released August 2020 CPI data where there was a contraction of 0.4 from 0.6 in July on a month-to-month basis. Meanwhile, China's CPI in August was 2.4, a YoY decline from a level of 2.7 last year. On Tuesday (9/7), Wall Street experienced a fluctuating 3 day period as well, as the DJIA slipped by 2.3% on Wednesday, risen by 1.7% on Thursday, and fell again by 1.45% on Friday. Other than that, the S&P 500 has dwindled from 2.8% to 3.331,84, while the Nasdaq also declined from 4.1% to 10.847,69. Another sentiment came from the revival of the US and Chinese trade war, which is related to customs that will block imports of cotton & tomato products from Xinjiang, West China. Other products being blocked include cotton yarn, textiles, apparel, and tomato paste. Suffice to say, wild fluctuations in the JCI can be partially attributed to various sources of global market conditions and Indonesia's economic circumstances. On the other hand, this week's volatile, up-down market condition calls back to the ongoing sentiment that the market is decoupled from the real economy.
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