Apart from the World Bank report, another report that was released on Wednesday indicated that consumer confidence in Southeast Asia's largest economy fell to 90.4. An outcome below 100 means a pessimistic view about the domestic economy.

Analysts expect the central bank (Bank Indonesia) to raise its benchmark interest rate by 25 bps from the current 6.0 percent soon. A higher interest rate will have a large impact on Indonesia's property sector. On Wednesday (03/07), Indonesia's property index, which has posted impressive growth this year, fell 4.5%.

Wall Street

After a short trading day, stock indices in the United States ended up as positive data about the US labor market outweighed political turmoil in Portugal and Egypt. The Dow Jones index rose 0.4 percent, the S&P 500 gained 0.1 percent, and the Nasdaq was up 0.3 percent. Wall Street closed earlier than usual (3pm local time) due to the fourth of July celebrations (Independence day). On Thursday (04/07), the stock market will be closed in the USA.

The ADP National Employment Report, which measures the monthly change in non-farm, private employment (based on the payroll data of approximately 400,000 US business clients), indicated that 188,000 more jobs were registered in June, while analysts had expected a much lower number. The release, two days ahead of government data, is a good predictor of the government's non-farm payroll report.

Turmoil in Egypt drove the price of oil above the level of USD $100 per barrel for the first time in nine months.

Standard & Poor's decision to downgrade the rating of several large European banks also caused financial institutions on Wall Street to weaken. Bank of America lost 0.5 percent, while the Citigroup declined 1 percent.

European Stock Indices

European indices were mostly negative due to a political crisis in both Portugal and Egypt as well as concerns about the weakening growth in China. The stock index in Portugal fell six percent with mostly Portuguese banks taking large blows. Ten-year bond yields were pushed above eight percent for the first time since November 2012 as a result of political turmoil after two ministers stepped down earlier this week over disagreement about the country's austerity plans.

Negative market sentiments were also brought on by a slowing down of China's services sector. In June, it fell to the lowest growth rate in nine months.