Roller Coaster Ride Indonesian Stocks and Rupiah. What Happened Today?
Indonesian stocks experienced a remarkable roller coaster ride on Tuesday (29/09). After opening the benchmark Jakarta Composite Index fell more than two percent to a near three-year low. However, the index managed to finish the trading day at 4,178.41 points, a 1.41 percent rise. Meanwhile, Indonesia's rupiah managed to curb losses. Based on the Bloomberg Dollar Index, the rupiah passed beyond the IDR 14,800 per US dollar level several times but at the end of the day it had only weakened 0.11 percent to IDR 14,691 per US dollar.
However, Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated slightly more (0.22 percent) to IDR 14,728 per US dollar on Tuesday (29/09), a fresh 17-year low.
Indonesian Rupiah versus US Dollar (JISDOR):
| Source: Bank IndonesiaIndonesian stocks seem to be lifted by a technical rebound after five consecutive days of losses as well as on optimism about the government's second installment of an economic policy package (that is to be unveiled later today).
Perhaps assets in commodity exporting markets were also supported by a rebound in Glencore shares. Yesterday this commodity trader lost almost one-third of its value due to declining commodity prices in combination to the company's debt targets. Today, shares of Glencore rebounded nearly ten percent.
Jakarta Composite Index (IHSG):
Other Asian markets suffered severe losses. Japan's Nikkei 225 declined 4.05 percent, China's Shanghai Composite Index fell 2.02 percent, Hong Kong's Hang Seng Index weakened 2.97 percent, while Australia's S&P/ASX 200 fell 3.82 percent. These markets continue to be plagued by weak global sentiments brought about by concern about global economic growth (particularly China's hard landing) and a looming Federal Reserve Fed Fund Rate hike (investors are waiting for Friday's key non-farm payrolls data which may shed more light on whether US labour market conditions are solid enough to justify an interest rate hike). Other key data that is being awaited is Japan's industrial production (due on Wednesday) and China's Caixin Purchasing Managers' Index (PMI), due on Thursday.
One notable exception is India. After the central bank of India cut its key interest rate (for the second time this year) by 50 basis points (more than expected) to 6.75 percent (the lowest level in more than four years), Indian stocks surged.