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.