Jakarta. Jakarta Composite Index (JCI) sharply tumbled by 160 points, or 1.95 percent, to close at 8,066 on Tuesday as investors faced a barrage of negative sentiment from both global and domestic fronts, according to Pilarmas Investindo Sekuritas.

RTI data showed the index fluctuated between 7,974 and 8,284 throughout the session, with more than 48 billion shares traded, totaling Rp 31.8 trillion ($1.9 billion) across 3.2 million transactions. A total of 138 stocks gained, 583 declined, and 84 remained flat.

Pilarmas said the sharp decline was largely driven by the resurgence of trade tensions between the United States and China, just days after hopes of de-escalation. “By imposing new port charges on shipping firms targeting cargo vessels, both countries have now opened a new maritime front in their ongoing trade war,” the brokerage wrote in its Tuesday research note.

The market had earlier found relief after President Donald Trump softened his rhetoric on Sunday, signaling openness to a potential deal with Beijing, just two days after threatening to impose additional 100 percent tariffs and export restrictions on Chinese goods.

US Treasury Secretary Scott Bessent confirmed on Monday that Trump’s planned meeting with Chinese President Xi Jinping in South Korea later this month remains on track. Meanwhile, China’s Commerce Ministry defended its export curbs on rare earth minerals, asserting the policy was meant to safeguard national security rather than punish the US.

“Market concerns linger over whether both countries can reach a lasting trade agreement,” Pilarmas noted.

From Japan, uncertainty rose after the Komeito Party announced its withdrawal from the ruling coalition led by the Liberal Democratic Party, deepening doubts over Sanae Takaichi’s policy direction and premiership prospects. Japanese Finance Minister Katsunobu Kato said the current situation differs from the Abenomics era, emphasizing inflation rather than deflation as the main challenge.

Domestically, Pilarmas said the market is anticipating the government’s upcoming stimulus package to boost household spending in the fourth quarter of 2025. “The announcement is expected to be made directly by President Prabowo following his return from an overseas visit,” Pilarmas added.

The Finance Ministry is also considering injecting liquidity into state-owned banks (Himbara) to support credit expansion and sustain consumer demand. “Such measures could serve as a positive catalyst for the market,” Pilarmas said.

Across Asia, markets moved mixed on Tuesday. Japan’s Nikkei 225 slipped 1.4 percent to 47,419.87, while Hong Kong’s Hang Seng dropped 0.4 percent to 25,788.44. Shanghai Composite edged up 0.2 percent to 3,897.56. Australia’s S&P/ASX 200 eased 0.1 percent, whereas South Korea’s Kospi climbed 0.6 percent.

On Wall Street, US stocks rebounded overnight following Trump’s conciliatory comments toward China. The S&P 500 surged 1.6 percent to 6,654.72, the Dow Jones Industrial Average added 1.3 percent to 46,067.68, and the Nasdaq Composite jumped 2.2 percent to 22,694.61.

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