Asian markets sweat over Indonesia meltdown fears
Asian markets sweat over Indonesia meltdown fears
SINGAPORE (Reuters): A third day of anti-government riots in
Jakarta cut short an early rebound on most Asian markets
yesterday as traders again quaked in the shadow of Indonesia's
worsening social and political crisis.
The Indonesian rupiah gyrated wildly in razor-thin trade
against the dollar, plunging below 11,000 at one point on news of
the renewed rioting, before strengthening later.
The currency, along with other regional markets, had
strengthened earlier on a report that President Soeharto had
indicated he was willing to step down. The new riots dashed hopes
that the unrest might die down as a result.
Any optimism had mostly evaporated by the afternoon as parts
of the capital began to resemble a war-zone and many traders
simply stayed at home.
Mobs rampaged through sections of Jakarta, setting several
buildings on fire and looting, a day after 4 protesters were
killed.
Most regional markets avoided a repeat of Wednesday's sharp
losses, but they still fell and traders said there has been
virtually no benefit from a new record close on Wall Street
overnight as all eyes were on Jakarta.
"The situation there is well out of hand and has moved beyond
a small problem. It is a major focus of everyone there and here,"
said Kent Rossiter, institutional sales manager at Nikko
Securities in Hong Kong.
Hong Kong's Hang Seng index closed up 1.3 percent to 9,591.95
after earlier losses, but some other markets were not as
resilient.
In Singapore, seen as one of the countries most vulnerable to
an Indonesian breakdown, shares were battered for the second
straight day. The main index was down 2.87 percent at 1293.77 in
mid-afternoon before recovering a little to 1,305.21.
"The market rose on short covering following reports that
Soeharto could step down. But that quickly gave way," said a
dealer with a U.S. firm.
Japan's Nikkei index ended slightly down as a poor earnings
outlook for some firms added to worries over the Japanese economy
and the tense situation in Asia, brokers said.
The key 225-share Nikkei average closed down 0.24 percent, or
36.12 points, at 15,307.69. Nikkei June futures were down 120 at
15,210.
Paradoxically, Indonesian shares were little changed but
traders said any gains were simply a result of extremely thin
trade and arbitrage opportunities presented by the rupiah's fall.
Some brokerages were closed.
The Jakarta Composite index was 0.01 of point lower at 402.009
from a day low of 401.165.
Australian markets were also depressed by events in Jakarta.
The feeble local dollar was trading at 62.73 U.S. cents, just
above a 12-year low hit in overnight trade, and dragged Sydney
stocks down in tow.
The All Ordinaries index closed 14.3 points, or 0.52 percent,
down at 2,759.4.
Seoul stocks provided a rare bright spot in the region,
closing nearly two percent higher on bargain-hunting, brokers
said.
The Korean Composite Stock Price Index closed 1.78 percent, or
6.36 points, higher at 362.94.
Malaysian shares rose strongly in the afternoon, gaining 2.12
percent to 559.65 after hitting a low of 545.32. Thai shares,
down earlier, were up 0.11 percent to 371.34.
Manila markets were hit by worries about the slow pace of
vote-counting after Monday's presidential election on top of
regional gloom.
The main index ended down 33.67 points, 1.56 percent, at
2,130.
Markets in India, Asia's other current crisis point, continued
to suffer from the wave of international criticism following its
nuclear tests this week.