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November 8, 2024 | 10:18 am
TEMPO.CO, Jakarta - Donald Trump won and was re-elected as the President of the United States (US) after losing his seat in the previous period during the 2020 presidential election to Joe Biden. Trump won almost all swing states, including Georgia, North Carolina, Pennsylvania, and Wisconsin.
However, Donald Trump's victory received a negative response from the domestic market. This can be seen in how the Indonesia Composite Stock Price Index, or IHSG, recorded a decline of 1.44 percent or 108.06 points to 7,383.87 on Wednesday, November 6, 2024. Furthermore, foreign investors recorded a net sell of Rp1.09 trillion during that trading session.
On Thursday afternoon, IHSG closed lower despite the majority of Asian stock exchanges strengthening. The index closed down by 140.01 points, or 0.90 percent, to 7,243.85. Meanwhile, the LQ45 index, which consists of 45 leading stocks, fell by 14.43 points, or 1.60 percent, to 887.00.
"Asian regional markets tend to strengthen, as the market responds to China's trade surplus surging to US$ 95.27 billion in October 2024 from US$ 56.13 billion in the same period the year before, exceeding the market's expectations of US$ 75.1 billion," stated the Research Team of Pilarmas Investindo Sekuritas in their analysis in Jakarta on Thursday, as quoted from Antara.
Domestically, the market responded to Donald Trump's re-election as US President by considering its effects on the domestic financial market, where there would be capital outflow. Bank Indonesia (BI) predicts that the US dollar will strengthen, the benchmark interest rate of the US Central Bank will strengthen in the future, and the trade war will continue.
Meanwhile, analyst and senior economist at Mirae Asset Sekuritas, Rully Arya Wisnubroto, stated that the financial market in Indonesia responded negatively to Donald Trump's victory. "IHSG significantly weakened by 1.4 percent to 7,383.9, the first time below 7,400 since mid-August," he said in a written statement.
According to Rully, this fact is influenced by the risk-off sentiment experienced by the global market. This is due to concerns regarding the protective policies that Trump may implement, which could adversely affect world trade prospects.
The capital market observer William Hartanto also expressed a similar sentiment. He mentioned a sense of panic in the market, which caused the current response. William even stated that Trump's victory caused IHSG to collapse.
"This may be the effect of Donald Trump's historic victory in the previous election. Thus, his victory this time is immediately met with negative responses from the market," said William, as quoted in his official statement.
Meanwhile, the Director of the Indonesia Stock Exchange, Iman Rachman, said that the impact of the US election on IHSG needs further assessment. According to Iman, this is only a day after the end of the biggest political event in the US.
"Let's see first. It can't be just a day. (We must observe) a period. In my opinion, we need to see the effects," said Iman when met during the Opening Ceremony of the Capital Market Summit Expo 2024.
VEDRO IMANUEL G. | RR. ARIYANI YAKTI WIDYASTUTI
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