Indonesian shares slid to over 11-month low on Tuesday as concerns over an early rate hike by the Federal Reserve and a weaker rupiah weighed on the sentiment, while other Southeast Asian stock markets also retreated.
Jakarta Composite Index was down 3.1 per cent at 4,858.31, its lowest since June 30, 2014, led by financials amid possibility of a US rate hike as early as September.
“At the moment, I think we are being held hostage by the prospect of the Fed rate hike which could occur in the later part of this year,’’ said Harry Su, head of research at Jakarta-based broker Bahana Securities.
“This could mean further IDR weakness could continue to undermine sentiment on Indonesian market,’’ Su said.
Weak rupiah
Muhamad Alfatih, an analyst with Jakarta-based Samuel Sekuritas, said the weaker rupiah will hit a lot of companies that are exposed to big forex debt and dollar costs.
The rupiah is emerging Asia’s worst performing currency this year, having lost about 7.5 per cent year-to-date against the dollar. It has reached multiple 17-year lows since last week, and at 0400 GMT was trading at 13,380 to the dollar.
Philippines stock index was down 2.1 per cent at its lowest since January 8, a day after the Philippine peso hit more than one-year low.
On Tuesday, Philippine’s central bank governor said the monetary authority will let market forces determine the exchange rate and intervene only to deal with sharp currency swings.
Singapore was down 0.4 per cent to a near five-month low, Malaysia fell 0.4 per cent, and Vietnam was down 0.2 per cent, surrendering early gains. Thailand was 0.5 per cent weaker at 1.499.85, led by financial and energy shares.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.