Fragile Indonesia, yen lead Asian markets lower<\/p>\n
SINGAPORE (Reuters): Fears of renewed violence in Indonesia
\nand record lows for the yen pushed Asian markets downwards on
\nMonday.<\/p>\n
Shares in Hong Kong, Southeast Asia and Australia closed
\nlower, although the Tokyo stock market managed to recover from a
\nmorning slide to close 0.9 percent higher at 15,384.5.<\/p>\n
Hong Kong's Hang Seng Index lost 1.3 percent and ended at
\n9,412.0.<\/p>\n
\"I think people are quite concerned that a repeat of the
\n(Indonesian) violence last week is a possibility,\" said Andrew
\nFernow, director of research at Vickers Ballas in Hong Kong.<\/p>\n
Like most Asian markets, Hong Kong closed before the speaker
\nof the Indonesian House of Representatives called on President
\nSoeharto to resign, raising the possibility that Indonesia's
\nailing leader would indeed step aside to satisfy the mobs that
\nhave rioted over the past week.<\/p>\n
Before that news broke, more violence seemed likely,
\nespecially since Indonesian Moslem leader Amien Rais had declared
\nhe would bring millions of people onto the streets on Wednesday.<\/p>\n
The U.S. dollar surged above 135.42 yen in early European
\ntrade, its highest level since September 1991, as the market
\nseized on the absence of explicit support for the fragile
\nJapanese currency from the weekend meeting between leaders of the
\nGroup of Eight major economies.<\/p>\n
The yen led other Asian currencies downwards, especially the
\nbattered Australian dollar, which traded at 62.11 U.S. cents in
\nLondon, just above its 11 1\/2 year low.<\/p>\n
\"Everything hinges on the yen,\" said one dealer in Taipei as
\nthe Taiwan dollar fell sharply to a close of 33.765 per dollar.<\/p>\n
Indonesian shares rallied briefly before the close after House
\nspeaker Harmoko issued the call for Soeharto to quit, but the
\nJakarta market still finished 4.2 percent lower at 388.9.<\/p>\n
Australia's All Ordinaries index lost 1.2 percent, to close at
\n2733.3, with stocks exposed to Indonesia leading the way.<\/p>\n
It was much the same story across Southeast Asia: Singapore
\nshares were down 2.3 percent to 1291.7, Kuala Lumpur down 3.0
\npercent to 550.0 and Bangkok down 3.3 percent to 357.2.<\/p>\n
The Thai market was also worried that the authorities would
\nshut more of the country's financial institutions.<\/p>\n
Taipei shares finally rallied as investors decided that the
\nfalls of the previous five days had reflected Indonesian
\ninstability quite enough.<\/p>\n
\"The instability in Indonesia would surely slow down the
\nfuture recovery of Southeast Asian nations,\" said Beyond Asset
\nManagement president Michael On in Taiwan. \"However, the recent
\nTaiwan index falls should have mostly reflected the negative
\nimpact.\"<\/p>\n
The Taiwan market closed 0.8 percent higher at 8134.89.<\/p>\n
Analysts said the G8's silence on currency levels was taken as
\na green light by the markets, which were aching to buy the dollar
\nas a hedge against Asian turmoil but had been restrained by fears
\nof central bank intervention.<\/p>\n
The final communique from the G8 meeting in Birmingham
\nwelcomed Japan's latest fiscal stimulus package, with the usual
\nproviso that more deregulation would be helpful, but made no
\nmention of currencies.<\/p>\n
\"It looks like they have stopped talking it (the dollar) down
\nfor the time being,\" said one analyst. \"The market wants the
\ndollar higher against the yen and it hasn't finished yet.\"<\/p>\n
Seoul shares closed 1.9 percent higher at 359.0 on buying from
\nsmall investors bullish about easier labor tension.<\/p>\n
The won followed other Asian currencies lower, however, and
\nclosed at 1,444 per dollar, compared with Friday's close of
\n1,436.<\/p>\n
The Singapore dollar fell through 1.65 per dollar, although it
\nhad recovered to 1.6490 by 1200 GMT.<\/p>\n
The Malaysian ringgit fell to 3.8100 per dollar, from the
\nprevious close of 3.7800, and the baht fell to 39.25 from 38.90.<\/p>",
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"sponsor": "Okusi Associates",
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