Markets

Indonesia stocks tumble 4.99pc in morning trade

JAKARTA : Indonesian stocks tumbled nearly five percent in morning trade on Monday, following the downgrade of the Unite

Published August 8, 2011 Updated August 8, 2011 05:30am

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By Shoaib Ur Rehman

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Indonesian shares fell 195.86 points or 4.99 percent to 3,725.78 by the lunch break, despite the bright growth outlook for Southeast Asia's biggest economy, analysts said.

"The short-term trend will be negative because this is about market sentiment, all global markets are being affected," Standard Chartered Bank senior economist Fauzi Ikhsan told AFP.

"But it's all about the economy fundamentals of a country. Indonesia has good fundamentals and the market will be more rational in the middle and long term." Indonesia is expecting ratings agencies to give it investment grade in the coming months and Ikhsan said foreign capital flows would "significantly" return to Indonesia after the current uncertainty passed. Economic Minister Hatta Rajasa said there was "no need to panic".

"This is just a ripple effect from what happened in the US and Europe," he told reporters, referring to the debt crisis in Europe and the credit downgrade in the United States.

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