Indonesia's benchmark stock index (Jakarta Composite Index) was down over 2 percent, touching a three-year low, while the rupiah weakened beyond the IDR 14,800 per US dollar level (Bloomberg Dollar Index) around 09:00 am local Jakarta time on Tuesday (29/09) as the global selloff persists. Investors are concerned about the economic conditions of China and the world, low commodity prices, while anticipating a Fed Fund Rate hike.
Most stock indices in Asia are suffering heavy losses today. Japan's Nikkei 225 Index was down nearly three percent (the yen is strengthening against the US dollar as investors seek a safe haven), China's Shanghai Composite Index had fallen over one percent, Hong Kong's Hang Seng Index had declined 3.14 percent, while Singapore's Straits Times Index was down 1.39 percent around 9:30 am local Jakarta time.
Asian shares followed the weak performance of Wall Street and Europe yesterday. On Monday (28/09), the Dow Jones Industrial Average plunged 1.92 percent, Nasdaq plummeted 3.04 percent, while the S&P 500 dropped 2.57 percent. This poor performance is due to concern about falling commodity prices and the global economy. Moreover, investors are waiting for US non-farm payrolls (due this Friday) as these data may signal whether US labour conditions are strong enough to justify a Fed Fund Rate hike later this year.
Concern about low commodity prices was evidenced by the selloff in commodity trader Glencore, which lost almost a third of its value on Monday.