Asian markets calmer as Indonesian marts paralyzed
Asian markets calmer as Indonesian marts paralyzed
SINGAPORE (Reuters): Asian markets stabilized yesterday despite a rising body count in Indonesia's troubled capital, paralysis on Jakarta's financial markets.
After several days of sharp losses and volatility caused by Indonesia's descent into near chaos, dealers said the region's markets had priced in most of the bad news from Indonesia although trade was still very cautious.
Most Asian currencies firmed slightly as traders unwound long dollar positions, but news of more violence in Indonesia kept the market on edge.
The Indonesian rupiah and stocks were shielded from heavy falls by a virtual lack of trading. The central bank announced in the morning that all banks would be shut and there would be no trade in the rupiah yesterday.
The stock market opened for business, but trade was painfully thin.
At 0720 GMT Jakarta's main index was up 0.55 percent at 405.937 while the rupiah was being quoted in a wide range between 10,500 and 11,500.
Hong Kong stocks dipped in afternoon trade after spending most of the day higher. The Hang Seng was down 0.26 percent at 9568.95.
Andrew Fernow, director of research at Vickers Ballas, said the gravity of the situation in Indonesia was now well known.
South Korean markets registered a belated reaction to Indonesia's woes, as the stock market and the won sagged despite positive news that a limit on foreign stockholding would be abolished on May 22.
The Korea Stock Exchange composite stock price index ended down 10.11 points, or 2.79 percent, at 352.83 points.
"Investors are increasingly nervous over possible fallout from the crisis in Indonesia," said Moon Ji-ho, a broker at Daishin Securities.
Shares in Southeast Asia, seen as most vulnerable to Indonesia's troubles, staged a nervous recovery after heavy losses in recent days.
Singapore's main share index was up 12.77 points, 0.98 percent, at 1314.55 at midday, but traders said everything still hinged on events in Indonesia.
Malaysian shares were up two percent at 571.77, and Thai shares had gained 0.30 percent to 369.92, but Indonesian woes were making upward progress slow, dealers said.
The Malaysian ringgit and Singapore dollar both gained as traders used them as proxies to square long dollar positions before a G8 summit at which Indonesia is expected to feature prominently.
Lackluster Australian stocks were slightly higher, with few willing to venture into the market with so much uncertainty in Asia and following a drop in U.S. stocks overnight.
The All Ordinaries index was up 6.4 points to 2,765.8. The flagging Australian currency was unable to lift itself from 12-year lows around 62.7 U.S. cents. Analysts said the Australian dollar was likely to remain pinned down by events in Asia for the time being.
Trade on Japan's Nikkei index was similarly subdued, with traders saying the market was caught in no-man's land amid Indonesia's worries and caution ahead of the forthcoming G8 summit in Birmingham.
The Nikkei index closed down 0.42 percent at 15,242.86.
The Indian rupee was weak but stayed clear of Thursday's all- time low of 40.77 per dollar and firmed against the forward dollar as the market took a breather after its recent sell-off.