Jakarta. The Indonesia Stock Exchange, or IDX, stopped short selling at the local burse on Monday, seeking to stave off a further decline in the stock market caused by panic selling as the novel coronavirus outbreak shows no sign of stopping and the Indonesian government announced the first two cases of the Covid-19 infections in the country. 

The Jakarta Composite Index has declined 7.3 percent in the past week, its largest decline since the 2008 financial bust.

The index continued to fall 1.68 percent on Monday, following Indonesia's announcement of its first two cases of the Covid-19 disease. 

The exchange said short selling – a common market practice that involves traders selling stocks they borrowed from third-party to be repurchased at a lower price – would only add to the downward pressure in the Indonesian stock market and fan investors' panic.

"The exchange will not publish any list of securities that can be traded in short selling until a future date to be determined later," the IDX's corporate secretary, Yulianto Aji Sadono, said in a statement on Monday. 

The exchange would not process any application from securities interested in short selling until an unspecified time, Aji said.

"The exchange would always strive to strengthen market supervision, the supply of market products and conducive trade arrangements," he said. 

Fear of a continued Covid-19 outbreak wiped out $5 trillion from stock markets across the globe last week – the worst week since the 2008 financial crisis. 

Indonesia's stock market was among the hardest hit in Southeast Asia as investors, fearing the fallout from the Covid-19 outbreak outside China, sold their holdings to flee to safer assets like gold and United States government bonds. 

The Philippines' stock market fell 7.9 percent last week, followed by Indonesia (7.3 percent), Vietnam (5.5 percent), Singapore (5.3 percent) and Malaysia (3.2 percent). 

"The exchange is working with the Financial Services Authority and the government to formulate initiatives and incentives to counter the impact of the coronavirus outbreak on the Indonesian capital market," Aji said.