JSX shares plunge amid selling pressure in regional markets
JAKARTA (JP): Shares on the Jakarta Stock Exchange (JSX) plunged on Monday amid selling pressure in reaction to the declines in regional markets, securities analysts said.
The analysts said that regional equity markets responded very negatively to a major correction on Wall Street on Friday. The sentiments spread to the regional market, then to JSX which experienced a six-month low on Monday.
The JSX Composite Index fell 4.9 percent or 27.5 points to 529.26 after reaching the intraday low of 527.01.
Total turnover was 492 million shares worth Rp 693 billion.
The vulnerable rupiah remained stagnant, closing with little change at 7,675 on Monday as compared to 7,615 last Friday.
"If the regional markets are down, so are we," said Laksono Widodo from ING Baring Securities.
Laksono said the JSX might continue to be bearish Tuesday as American stocks are expected to continue to fall as there were some investors in the U.S. last week who missed their exit.
He insisted that the fall in the JSX shares was mainly due to those external factors.
"We would not look "that bad" as long as the other bourses in the region were also experiencing a slump," Laksono said.
Market participants on the JSX observed there was some buying by local investors which lifted the index from the intraday low, but failed later in the day to sustain momentum.
Nurkhamid of Arga Artha Securities said investors who were worried and wanted to sell their shares often took a temporary "buy" position to influence the market sentiment before they really sold their holdings.
"It is a common technique used to reduce devastations from a cut loss," Nurkhamid said.
"Frankly speaking, the current situation is not good. The U.S. markets might lead to a crash," he said.
Another analyst said the Composite Index was seeing its next support level at 500 points, after breaching the 550 point level.
"It is close to impossible now to foresee the technical curve. I don't know how soon the index will fall through the important 500-point psychological level," he said.
The tech-laden Nasdaq composite index in the United States tumbled 355.51 points or 9.67 percent to close at 3,321.27, while the blue-chip Dow Jones Industrial Average plummeted 617.78 points or 5.66 percent to 10,305.77.
In Tokyo, the benchmark 225-issue Nikkei Stock Average fell in its fifth-largest drop, prompting officials to consider propping up the market, Associated Press reported.
The Nikkei lost 1,426.04 points, or 6.98 percent, to close at 19,008.64. On Friday, the average closed down 91.74 points, or 0.45 percent.
Prime Minister Yoshiro Mori was quoted by Kyodo News agency as saying the government was "carefully monitoring" the market.
In Hong Kong, the blue-chip Hang Seng Index fell 1,380.39 points, or 8.6 percent, closing at 14,762.37. It was the index's worst point decline since Oct. 28, 1997, when it shed 1,438.31 points.
The Korea Composite Stock Price Index closed at 707.72 points, down 93.17, or 11.6 percent. It was the market's biggest single- day decline both in terms of points and percentage.
Singapore's benchmark Straits Times Index fell 190.37 points, or 8.69 percent, to close at 1,999.39. It was the STI's biggest fall since Oct. 20, 1987, when the index fell 266 points, or 25.3 percent, to 787.53.
The Taipei exchange's Weighted Stock Price Index, however, rose 126.88 points, or 1.4 percent, to 8,993.68.
The New Zealand market's benchmark NZSE-40 Capital Index fell 97.18 points, or 4.7 percent, to 1,973.78, its largest single session loss since Oct. 28, 1997.
The 30-company Philippine Stock Exchange Index plunged 75 points, or 4.8 percent, to 1,637.54, its lowest level in five weeks.
The Australian share market also tumbled 5.7 percent, posting its largest one-day point decline since October 1997. The All Ordinaries Index fell 176.0 points to 2,920.0.
In Kuala Lumpur, the main Composite Index closed at 874.97 points, down 56.24 points, or 6 percent, while in Bangkok, Thai shares declined 5.2 percent, with the Composite Index falling 21.57 points to close at 392.88. (udi)