Indonesian rupiah, shares fall as protests rock Jakarta

BENGALURU: Indonesian stocks and the rupiah fell on Friday as escalating political protests in Jakarta rattled investor confidence, while broader Asian markets were subdued ahead of a key US inflation data that could signal Federal Reserve policy direction.

Tensions in Indonesia mounted on Friday, a day after a motorcycle rider died when he was hit by a police vehicle during violent clashes after a demonstration outside parliament over several issues, including lawmakers’ pay and education funding.

The Jakarta Composite Index tumbled as much as 2.3 percent in early trading — its steepest intraday drop since June 23 — before paring losses to close down 1.3 percent. The rupiah led regional currency declines, slumping 0.95 percent to 16,495 per dollar before recovering to trade 0.8 percent lower following suspected central bank intervention.

Bank Indonesia’s monetary department head Erwin Gunawan Hutapea reiterated the central bank’s commitment to market stability across offshore, onshore and spot markets.

Despite the selloff, Jakarta’s benchmark remains up 3.8 percent this month after hitting a record high Thursday.

“After a strong rally since April, the recent protests are giving investors an excuse to take some profits,” said Gary Tan, portfolio manager at Allspring Global Investments in Singapore.

Meanwhile, Thai shares fell 0.2 percent as the Constitutional Court prepared to decide Prime Minister Paetongtarn Shinawatra’s fate in a dismissal case.

Other regional markets reflected cautious sentiment ahead of US inflation data.

South Korean shares and Philippine equities declined 0.4 percent and 0.6 percent, respectively, while Singapore and Taiwan bucked the trend with 0.4 percent gains each.

Currency markets showed broad risk-off sentiment. The Philippine peso and the South Korean won fell 0.4 percent each.

The Malaysian ringgit fell 0.2 percent, while the Singapore dollar and Taiwan dollar traded flat. The Indian rupee hit a record low.

The Philippines’ central bank delivered an anticipated 25-basis-point rate cut on Thursday while signalling that its easing cycle may be complete.