Indonesia stocks tumbled more than 5 percent on Thursday, wiping out all their gains this year as concerns over the struggling rupiah currency and fears over the global economy heightened risks in a market that had been the region's best performer. Other Southeast Asian markets also lost ground as a gloomy outlook for the US economy by the Federal Reserve put a spotlight on risky emerging-market investments.
Indonesia's main stock index was down 5.72 at 0437 GMT, the region's worst performer on the day and hovering at its lowest since March 17. Thailand fell 2.5 percent, Singapore was down 1.8 percent, and Malaysia shed 1.3 percent by 0455 GMT. Philippines was off 2.6 percent. Financial stocks led falls in the region with Indonesia's largest lender, Bank Mandiri, down more than 8 percent, Bangkok's Siam Commercial Bank off 4 percent and Singapore's DBS down 2 percent.
On Wednesday, Federal Reserve Chief Ben Bernanke warned there were "significant downside risks" to the US economy which it moved to counter with an effort to reduce long-term borrowing costs and bolster housing. Analysts in Jakarta said a weaker rupiah also contributed to the market's worst performance in the day. "I don't think it's all because Bernanke's speech. If it were only about Bernanke's speech we could only down 1 or 2 pct following the region. It's mainly because of internal currency issues with rupiah seen weakening above 9,000," said Pardomuan Sihombing, head of research at Jakarta-based Recapital Securities. Indofood was down 7 percent and Astra was down 8 percent by 0450 GMT.
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