United States' stock market suffered after President Donald Trump said the worst of the outbreak could last through August and that it was not currently under control - Photo by White House

JAKARTA (TheInsiderStories) – Good Morning! Strong selling into the close left Wall Street with another day of historic losses since crash in 1929. United States (US) stock market suffered after President Donald Trump said the worst of the outbreak could last through August and that it was not currently under control.

He also sees the pandemic could cause a recession, which prompted investors to head to the exits. The Dow declined was the second-biggest percentage drop in history, after dropped 12.93 percent, followed by Nasdaq Composite loss 12.32 percent, and S&P down 11.98 percent.

Not only in stock market, crude prices also tumbled on Monday, after an emergency Federal Reserve interest rate cut did nothing to stem the panic among investors triggered by the rapidly spreading coronavirus. West Texas Intermediate (WTI) crude for April delivery fell 5.2 percent to US$30.07 a barrel while May Brent crude dropped more than 7 percent to $31.37 per barrel. Last week, WTI fell 23 percent and Brent lost 25 percent.

According to World Health Organization (WHO), globally, this virus has infected more than 168,000 people and killed at least 6,610. The US and countries throughout Europe have closed schools, entertainment venues and all public facilities, and restricted travel both inside and outside the country.

Italy’ COVID-19 cases surged as the US expanded a travel ban to the United Kingdom and Ireland, Germany partially shut borders, while France went into partial lockdown. Italy now records 27,980 infections even though just four days ago 15,113 infections were recorded. The country recorded 349 new deaths from the corona virus, bringing the total number of deaths since last month to 2,158.

In Asia, South Korea and China are worried about infections from abroad, tightening requirements for international arrivals. WHO acknowledges that more cases are now being reported outside of China.

To curb the economy from the pandemic, the central bank of the United Arab Emirates and Saudi Arabia plan to provide stimulus worth US$40 billion. Yesterday, the Bank of Korea (BoK) cut its policy rate by 50 basis points to 0.75 percent. South Korea has been one of the early epicenter of the escalating coronavirus crisis.

Along with the Reserve Bank of Australia and the Reserve Bank of New Zealand, the BoK may soon join the ranks of Asia Pacific central banks that are being forced to consider utilizing unconventional monetary policy tools due to the economic shocks and stresses to world financial markets from the pandemic.

In Indonesia, minister of finance, Sri Mulyani Indrawati, requires local governments use its budget spending to help the prevention and handling of the virus spread. The central government itself has prepared an additional budget for the health ministry Rp1 trillion ($68.96 million) for handling the outbreak.

Its regulated in the minister of finance rule Number 19 of 2020 concerning Distribution and Use of Revenue Sharing Funds, General Allocation Funds, and Regional Incentive Funds for Fiscal Year 2020 in the Context of Countering COVID-19.

While, today, President Joko Widodo will lead the limited meeting on special economic zones of Mandalika in West Nusa Tenggara. He also has scheduled to evaluate the implementation of Post-Disaster Rehabilitation and Reconstruction in the same province.

On Monday, Indonesian Rupiah closed down 1.05 percent to the level of 14,933 a US Dollar and the middle rate of Bank Indonesia also weakened 0.02 percent at the level of 14,818 against the Greenback. And, the Jakarta Composite Index (JCI) was corrected 4.42 percent or to 4,690.66.

Analysts assess the local currency and stock index will still tend to weaken in today’ trading causes stimulus such as trimming the Fed‘ interest rates alone cannot lift the performance of the two major instruments.

They rated, the capital outflows are still possible. Based on the various conditions, the observers sees there is still a possibility that the Rupiah will move in the range of 14,800 – 15,200 per US Dollar and the JCI between 4,734 to 4,489 compared to Monday.

They recommended PT Unilever Indonesia Tbk (IDX: UNVR), PT Media Nusantara Citra Tbk (IDX: MNCN), PT Indah Kiat Pulp & Paper Tbk (IDX: INKP), PT Bank Rakyat Indonesia Tbk (IDX: BBRI), PT Telkom Indonesia Tbk (IDX: TLKM), PT Bank Mandiri Tbk (IDX: BMRI), PT Diamond Food Indonesia Tbk (IDX: DMND), PT Merdeka Copper Gold Tbk (IDX: MDKA), PT Astra International Tbk (IDX: ASII), PT Bank Central Asia Tbk (IDX: BBCA), PT HM Sampoerna Tbk (IDX: HMSP), PT Gudang Garam Tbk (IDX: GGRM), and PT Bank Negara Indonesia Tbk (IDX: BBNI) for today.