• Stocks regain some losses after trading halt lifted
• Central bank has intervened aggressively to defend rupiah
• Bourse changes trading rules to anticipate stock selloff
• BI to weigh rate cut decision against FX weakness, analysts say

JAKARTA, April 8 (Reuters) - Indonesia's stock market sank on Tuesday, prompting a 30-minute trading halt, while the rupiah fell to a record low as markets reopened after an extended holiday break and reacted to the global market turmoil caused by U.S. tariffs.

The main index (.JKSE) , opens new tab fell 9.2% to its weakest since June 2021 in early trade. After the trading suspension was lifted, the index recouped some of its losses and was down 7.6% by 0704 GMT.

Sign up here.

The rupiah fell 1.8% to as low as 16,850 per dollar, surpassing its Asian Financial Crisis trough to its weakest on record, according to LSEG data.

The central bank has and will continue to "intervene aggressively" in the spot foreign exchange, domestic non-deliverable forward (NDF) and bond markets, as well as in the offshore NDF market, to stabilise the rupiah, Fitra Jusdiman, a Bank Indonesia (BI) official said.

However, some analysts predict further declines, even as the stock exchange modifies trading rules to prevent excessive selloffs.

Ahead of Tuesday's market opening, the exchange tightened auto-rejection rules for share transactions. Now, if a stock falls by 15%, sell orders would be automatically rejected, compared with the previous trigger of a share price fall of between 20% and 35%.

The bourse stated that a fall of 8% in the main index would trigger a 30-minute trading halt, expanded from 5% previously. Another 30-minute halt is triggered if the market then extended losses to 15%.

A decline of more than 20% would result in trading being suspended for the rest of the day, which the bourse said would allow investors "liquidity space and opportunity" to process information. The previous trigger for such suspension was a 15% drop.

"These are taken in anticipation of market conditions. We do not want to create panic, but we want domestic and foreign investors to have confidence that we give them enough room to transact after more than a week of break," IDX chief executive Iman Rachman told a press conference.

Trading rules could be adjusted back when conditions return to normal, an IDX executive said.

Oktavianus Audi, a vice president at brokerage Kiwoom Sekuritas, said the new auto-reject rules could provide some support for the stock index, but emphasised that the rule changes would only serve as short-term measures.

"Basically, the concern in the market is caused by macroeconomic factors and Trump's tariff policy," he said.

"So in our opinion, to ease market pressure we need strategic measures by the government to maintain the rupiah's stability, ensure economic growth remains above 5% and a strategic response to maintain Indonesia's trade surplus," Audi said.

RATE CUTS?

Fitra at BI said the central bank would continue its market stabilisation efforts to maintain market confidence while it monitors developments.

Several economists expected more dovish moves by the U.S. Federal Reserve which may give BI space for bigger rate cuts, or bring them forward, to bolster growth. However, policymakers would have to weigh that against the impact on the rupiah.

"Further one-sided weakness in the rupiah, due to global uncertainties and lingering lack of clarity on domestic issues, might push the markets to price out rate cuts this year," said DBS Bank economist Radhika Rao.

Potential more Fed rate cuts, as well as low inflation domestically, would provide room for BI to cut rates, said Bank Danamon economist Hosianna Situmorang, adding that annual inflation in March was 1.03%, below the central bank's target range.

Brokerage Mandiri Sekuritas, in a note to clients, said it expected less impact from tariffs on Indonesian equities compared with other markets due to its more domestically-driven economy. It predicted Jakarta could outperform other markets should there be any softening in the U.S. position on tariffs.

Indonesian markets closed on March 27 for Eid al-Fitr holidays and are catching up with global market movements following the U.S. tariff announcement last week, which included a plan for a 32% tariff on Indonesian products.

Markets were already under pressure before the break due to concerns over Indonesia's fiscal policy and growth prospects.

Jakarta plans to pursue negotiations rather than retaliate against the U.S. tariffs, proposing to buy more U.S. products.

https://www.reuters.com/markets/asia/indonesia-stock-exchange-says-20-fall-would-see-trade-suspended-day-2025-04-08/