Jakarta Index Sinks, Rupiah Flat Against Dollar

Jakarta, Aug 28 (Antara) - The Indonesian market has continued to be under pressure with the Jakarta composite share price index sinking lower on Wednesday morning. The index of the Indonesian Stock Exchange (BEI) lost 65.37 points or 1.65 percent in the opening trade to 3,902.47 points. The index of 45 most liquid stocks fell 3.44 percent to 630.43 points. "After being long beset by reports of imminent cut of the monetary stimulus by The Fed, mounting political tension in Surya brought about greater nervousness in the stock markets," Trust Securities` chief researcher Reza said . He said economic slowdown in Southeast Asia and big reversal in capital flow added to the negative sentiment weakening the BEI index. An executive of the financial super body, the Financial Service Authority (OJK), Nurhaida, said the stock market watchdog would continue to seek to maintain the public confidence in the Indonesian market. "We are aware of the condition in the domestic financial market with rupiah losing value against the US dollar, high inflation, all contributing to the fall of the BEI index," Nurhaida said. Regional markets such as Hang Seng suffered a 1.69 percent fall in index to 21,507.87 points with Nikkei-225 index down 1.94 percent to 13,276.50 points and that Straits Times losing 1.03 percent to 3,002.48 points. Meanwhile, Indonesia`s rupiah opened flat at the level of 11,260 per dollar on Wednesday morning with market players anticipating the impact of US plan to launch military intervention in Surya. "The US plan to invade Surya has added to uncertainties over the imminent tapering of US central bank monetary stimulus ," Reza Priyambada said. The condition could bring about more negative sentiment weakening the currencies of developing countries including rupiah, he said. "As is in the share market , there has been no positive sentiments that would lift rupiah from the negative area," he said. Monex Investindo futures` chief researcher Ariston Tjendra said the situation in Surya could trigger worries in the global financial market prompting investors to spend their money on safe assets. "Investors would look for safe havens like the US dollar and precious metals," Ariston said.