Although most stock markets in Asia were still in red territory, extending Monday's plunge, Indonesian stocks and the rupiah managed to rebound on Tuesday (05/01). Indonesia's benchmark Jakarta Composite Index rose 0.70 percent to 4,557.82 points. Meanwhile, the Indonesian rupiah appreciated 0.37 percent to IDR 13,892 per US dollar (Bloomberg Dollar Index). What happened on today's trading day and what explains the deviation between Indonesian assets and the general Asian trend?

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Indonesia's Ministry of Energy and Mineral Resources expects coal shipments to India to rise in 2016, while coal exports to China are expected to decline further as the world's second-largest economy is experiencing a persistent slowdown (and China curbed imports of coal with a lower calorie grade). Adhi Wibowo, Director for Coal at the Energy Ministry, said - contrary to China - coal demand from India has not fallen. Moreover, India is highly dependent on Indonesia for its thermal coal.

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When the government of Indonesia banned the sale of alcoholic beverages in minimarkets and kiosks in early 2015 in an effort to “protect the morals and culture of Indonesian society”, it came as a shock to alcoholic beverage producers. Although alcoholic drinks are still allowed to be sold in the larger supermarkets, restaurants, cafes and hotels, sales of beer plunged as the beverage was banned in the (estimated) 70,000 minimarkets that have become a very popular shopping place in the urban areas of Indonesia.

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Contrary to expectations, Indonesian stocks and the rupiah had a weak start of the new year. On Monday (04/01) Indonesia's benchmark Jakarta Composite Index fell 1.46 percent to 4,525.92 points, while the Indonesian rupiah depreciated 0.82 percent to IDR 13,943 per US dollar (Bloomberg Dollar Index). The performance of Indonesian stocks is in line with the performance of stocks around the globe. In China stock trading was even halted twice due to its plunging index. What happened today?

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