Update COVID-19 in Indonesia: 70,736 confirmed infections, 3,417 deaths (9 July 2020)
6 July 2020 (closed)
USD/IDR (14,501) +55.01 +0.38%
EUR/IDR (16,343) -41.31 -0.25%
Jakarta Composite Index (5,052.79) -23.38 -0.46%
Despite the selloff on Wall Street overnight where the Dow Jones Industrial Average plunged 1.9 percent, the S&P 500 tumbled 2.23 percent, while the Nasdaq Composite dropped 2.74 percent, losses in Asia were less severe on Tuesday morning (03/04) as these losses were kept below 1 percent, overall. The selloff on Wall Street, partially driven by a sell-off of tech industry giants, was the weakest start of the second quarter for US shares since the Great Depression.
Shares on Wall Street plunged overnight as there emerged renewed concerns about a looming trade war between the USA and China, a war that would be felt across the globe. Around two weeks ago - after already having imposed steep tariffs on steel and aluminum imports - US President Donald Trump announced his plan to impose up to USD $60 billion in new import tariffs on Chinese products.
China retaliated by imposing tariffs of up to USD $3 billion on a wide range of US products (together totaling 128), including pork, fruit, scrap aluminum. It is assumed that US farmers are hit hardest by Chinese retaliations as they sent almost USD $20 billion worth of goods to China in full-year 2017.
Although both countries have not confirmed that a trade war has started, investors have been seeing the signs on the wall. Moreover, also the European Union (EU) recently stated that it would retaliate with their own import taxes against the US.
Meanwhile, the latest US manufacturing activity data showed new orders for US manufacturing companies in March 2018 were at their lowest since August 2017.
Besides concerns about a looming trade war, US tech shares plunged as Trump criticized Amazon.com over the pricing of the company's deliveries through the US Postal Service and promised changes.
So far this year global stocks have only fallen 3 percent. However, volatility has been extremely high and investors will not feel safe with the looming escalating trade war.
Meanwhile, crude oil prices plunged over 3.7 percent on Monday (02/04) amid concern about higher Russian output, the looming US-China trade war and expectations that Saudi Arabia will cut prices of crude oil.
By 10:45 am local Jakarta time on Tuesday (03/04) Japan's Nikkei 225 Index had fallen 0.88 percent, China's Shanghai Composite was down 0.91 percent, Hong Kong's Hang Seng Index had declined 0.60 percent, South Korea's Kospi Index had fallen 0.49 percent, while Indonesia's Jakarta Composite Index was down 0.40 percent.
Meanwhile, the Indonesian rupiah had depreciated 0.11 percent to IDR 13,767 per US dollar by the same time.
Indonesian Rupiah versus US Dollar (JISDOR):| Source: Bank Indonesia