Indonesian Stocks, Rupiah Slide as Markets Digest Tariff Shock

By Fabiana Negrin Ochoa

Indonesian stocks tumbled as local markets reopened after the week-long Eid holidays, catching up to the declines in global equities since President Trump announced sweeping tariffs last week.

The benchmark Jakarta SE Composite Index opened 9.2% lower as traders reacted to the 32% reciprocal tariff the U.S. set on Indonesian goods last week.

That triggered a 30-minute trading halt, coming after bourse regulators increased limits for the market's decline to control "volatility and ensure investor protection."

The index recouped some ground and was last 7.5% lower, with banking and consumer discretionary stocks among the top decliners as tariff-related uncertainty dampened already-weak sentiment.

Shares of major lenders Bank Rakyat, Bank Mandiri and Bank Central Asia slid about 10% each early in the session before paring losses, while tech giant GoTo Gojek shed over 14%.

The rupiah also touched a new record low, weakening to 16850 against the dollar.

The tariff shock comes at a fragile time for Indonesian markets, which have been suffering recently in part due to government policy shifts that have raised concerns about its financial stability.

President Prabowo Subianto's populist policies have cast doubt over the country's fiscal position, while trade war fears have raised concerns about a slowdown in Southeast Asia's largest economy, which relies on exports for around 20% of its gross domestic product.

Indonesia said last week that it is preparing strategic measures and intensifying diplomatic efforts in response to the U.S.'s reciprocal tariff.

UOB's Global Economics & Markets Research team sees room for a potential deal, viewing the sweeping tariff treatment globally as a tactic to bring countries to the negotiating table to improve the U.S.'s terms-of-trade positions.

But though Indonesia's exports exposure looks relatively manageable, the ripple effects of tariffs on other larger economies, especially China, could worsen Indonesia's already dimming near-term growth prospects, economist Enrico Tanuwidjaja said in a note.

Write to Fabiana Negrin Ochoa at fabiana.negrinochoa@wsj.com