The winning streak is over for the Indonesian stock market following five days of gain that saw it collect nearly 100 points or 7.5 percent along the way. The Jakarta Composite Index fell through support at 1,500 points, and now investors are bracing for even further declines at the opening of trade on Wednesday.

The global forecast for the Asian markets is broadly pessimistic, since the start of the corporate earning season was as bad as expected. Some other weak economic and corporate news added to the negative sentiment, which dragged the European and U.S. markets sharply lower - and the Asian markets are on track to follow that lead.

The JCI finished sharply lower on Tuesday, pulled to the downside as the financials fell under heavy selling pressure throughout the session. For the day, the index fell 25.78 points or 1.70 percent to close at 1,490.86. Among the decliners, PT Telkom dropped 3.4 percent and Bank Mandiri was off 3.2 percent.

The lead from Wall Street is sharply negative as stocks saw some further downside during trading on Tuesday after ending the previous session mostly lower. The major averages all ended the day firmly in negative territory, pulling back further off their recent highs, as traders continued to do some profit taking. The continued weakness in the markets came as traders expressed some anxiety about the upcoming earning season and stocks' ability to sustain the recent upward move in light of expectations of weak quarterly results.

After the bell, aluminum producer Alcoa Inc. reported a net loss for the first quarter, hurt by the impact of the economic downturn on its core industrial and commercial markets as well as an historic decline in aluminum prices. The company's quarterly loss per share also came in worse that what analysts had predicted. The company reported a net loss for the first quarter of $497 million or $0.61 per share, compared to net income of $303 million or $0.37 per share for the year-ago quarter.

This marks the second straight quarterly net loss for Alcoa, which reported a net loss of $1.2 billion or $1.49 per share for the fourth quarter in January. However, with most companies expected to report disappointing first quarter results due to the weakness in the economy, the guidance provided by the companies is likely to have a more significant impact on the markets.

Some selling pressure was also generated by a report from the Times of London, which said that new forecasts from the International Monetary Fund are expected to suggest that toxic debts racked up by banks and insurers could spiral to $4 trillion.

In other corporate news, Royal Bank of Scotland (RBS) announced that it has begun consulting Unite and other employee representatives about a business plan for its back office operations that will involve job losses. The bank said that the plan could affect up to 9,000 jobs over the next two years, including 4,500 in the U.K. However, the actual number of jobs lost is expected to be significantly lower.

The major averages all posted steep losses on the day, with the Dow closing down 186.29 points or 2.3 percent at 7,789.56, while the Nasdaq closed down 45.10 points or 2.8 percent at 1,561.61 and the S&P 500 closed down 19.93 points or 2.4 percent at 815.55.

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