Asian financial markets slide as violence rocks Indonesia<\/p>\n
SINGAPORE (Reuters): Violence in Indonesia shook most Asian
\nfinancial markets yesterday, as the Jakarta stock index slumped
\nmore than 8 percent at one point and the rupiah sank.<\/p>\n
Late in the Asian day, the announcement by India's government
\nof two further underground nuclear tests battered share markets
\nthere and the rupee weakened.<\/p>\n
In Singapore, the key Straits Times Industrials Index shed
\nmore than 6 percent, following the deaths of six students in a
\nJakarta protest on Tuesday, but rebounded before the close. At
\nleast one man died in further clashes yesterday.<\/p>\n
Hong Kong's Hang Seng index suffered its biggest point drop in
\nmore than two months.<\/p>\n
Of the major markets, only Japan and South Korea bucked the
\ntrend and posted gains.<\/p>\n
The Jakarta composite index was 8.01 percent down by 0655 GMT
\nat 396.04 points as new student protests broke out in several
\ncities. But it later recovered to close just over the key 400
\nlevel. It ended down 6.61 percent or 28.47 points at 402.06.<\/p>\n
At least one person died in anti-government riots yesterday
\nnear a Jakarta university where the six students were killed in
\nclashes with security forces a day earlier.<\/p>\n
Shares in companies linked to the family of President Soeharto
\ncame under heavy pressure. Soeharto is currently in Cairo for a
\nGroup of 15 meeting.<\/p>\n
The rupiah slumped below the 10,000 level, where it was two
\nmonths ago, to trade at 10,750\/10,850 to the dollar at 0850 GMT,
\nbefore recovering slightly. In Tokyo the yen dipped below 134 to
\nthe dollar.<\/p>\n
Top Indonesian economics minister Ginandjar Kartasasmita told
\nReuters Television yesterday that Jakarta must respond somehow to
\nthe demands of student protesters.<\/p>\n
Liquidations in other Southeast Asian stock markets and
\nconcerns over high interest rates in Hong Kong also fueled the
\nmarket's bearishness in Singapore.<\/p>\n
The Straits Times Industrials Index was down 6.86 percent or
\n96.07 points at 1303.98 in late afternoon trade, but recovered to
\nclose at 1,331.98, down 4.86 percent or 68.07 points on the day.<\/p>\n
In Hong Kong the Hang Seng index closed down 3.78 percent or
\n372.22 points at 9,469.29, its biggest drop since March 5.<\/p>\n
\"People are expecting trouble in Indonesia, and it is hard to
\ntell how much is discounted, but the writing on the wall is that
\ntrouble is brewing,\" said Howard Gorges, a director at South
\nChina Brokerage.<\/p>\n
Stocks sensitive to interest rates were particularly hard hit
\nas local interbank rates rose amid talk of increased speculation
\nagainst the Hong Kong dollar.<\/p>\n
\"Riots in Indonesia continue to worsen, Asian currencies are
\nmostly lower and regional stocks generally dropped between one to
\ntwo percent this morning so Hong Kong is no exception,\" said
\nPercy Au-Young, sales director at DBS Securities.<\/p>\n
The tension was heightened by rumors in New York on Tuesday,
\ndenied by the Hong Kong Monetary Authority, that it had
\ninstructed major banks not to provide liquidity on Hong Kong
\ndollar forwards beyond three months.<\/p>\n
Despite the denial, Hong Kong's interbank rates were sharply
\nhigher at yesterday's fixing.<\/p>\n
Thailand's SET index shed 2.81 percent or 10.73 points to
\n370.92, on finance sector recapitalization concerns, while in
\nManila the main share index fell 2.30 percent or 50.85 points to
\nclose at 2,163.67, its lowest close in nearly two weeks.<\/p>\n
Sydney shares were marginally down, the All Ordinaries index
\nshedding 0.47 percent or 13.2 points to 2,773.7.<\/p>\n
In Tokyo, the Nikkei 225 index closed up 0.14 percent or 21.33
\npoints at 15,343.81, after moving in a negative zone all day,
\nhelped by a report that financial giants Nomura Securities Co Ltd
\nand Industrial Bank of Japan would tie up. Their shares climbed
\nsharply shortly before the market closed.<\/p>\n
In Seoul, the index closed up 1.34 percent or 4.72 points at
\n356.58, fueled by foreign buying in blue chips.<\/p>\n
Taiwan stocks shed 0.91 percent to 8,202.90, while Shanghai's
\nhard currency B share index closed down 1.60 percent at 47,519.<\/p>\n
News of India's further nuclear tests caused panic selling in
\nBombay, where the index for the exchange's top 30 shares had lost
\n4.08 percent, or 160.78 points, in late trade to 3,784.35.<\/p>",
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