• Mon. Jan 30th, 2023



EMERGING MARKETS-Indonesia stocks, currency steady after virus-scarred week

    * Indonesia stocks swing sharply through the session 
    * 10-year Indonesia bond yields rise to highest since
    * Graphic: Foreign flows into Asian stocks tmsnrt.rs/2ReJOMr
    * Goldman Sachs bullish on the rupee

    Sept 11 (Reuters) - Indonesia's stock and currency markets
touched multi-month lows on Friday as fresh COVID-19
restrictions in Jakarta ate into hopes of an economic recovery,
while overnight selling on Wall Street kept sentiment across
Asia subdued.
    Jakarta's main index rose 2%, after dropping nearly
3% early in the day, but was still on course for a weekly fall
of around 5% that would be its worst performance since March. 
    The rupiah, the region's worst hit currency this
year, slipped 0.4% and was heading for its biggest weekly loss
in a month.
    Ahead of the open, Bank Indonesia said again it would
intervene in the spot market to stabilise the rupiah, which
backs one of Asia's most popular bond markets for foreign
    Even with the spate of interventions in recent days, the
currency has dropped 2% in the two weeks since investors were
taken aback by a parliamentary panel's recommendations for
changes to the central bank.
    Investors fear the proposed changes could reduce the central
bank's independence at a time when the economy is struggling
with rising COVID-19 cases with a fresh lockdown in Jakarta from
Monday threatening to add further harm to its economy.
    "Foreign investors were already concerned about proposed
changes to the central bank law that could erode Bank
Indonesia's independence," said Khoon Goh, ANZ's head of Asia
    "Now with the capital heading into lockdown, Indonesia's
economic recovery is in doubt and this will see further investor
caution, likely leading to near-term outflows."
    Equity markets in the rest of emerging Asia found their
footing late in the day as Shanghai shares rose, with
Manila up 1% and stocks in Seoul erasing losses
to trade flat. However, renewed selling of high-valued U.S. tech
stocks overnight kept investors uneasy.
    "With risk sentiment edgy, investors are likely to remain on
the sidelines heading into the weekend," said Edward Ng, an
Asian fixed income portfolio manager at Nikko Asset Management
in Singapore.
    Currencies were mostly higher against a weaker dollar.
Malaysia's ringgit gained 0.2% after its central bank
held rates on Thursday in what some economists saw as a sign it
will hold off on further cuts this year.
    The Indian rupee was flat and stocks in Mumbai
 edged higher as Indo-China tensions looked to be
    The rupee is set to snap four straight weeks of gains, but
Goldman Sachs, buoyed by large foreign inflows in August, said
it is bullish on the currency, pointing to moves by the Reserve
Bank of India to allow it to appreciate and an attractive carry
trade volatility ratio.

    ** Indonesian 10-year benchmark yields up 9.5 basis points
to 6.996%
    ** Top gainers in Jakarta include Akbar Indo Makmur Stimec
Tbk PT and Pollux Properti Indonesia Tbk PT 
    ** Malaysia's 10-year benchmark yield up 2.5 basis points to
           Asia stock indexes and currencies at 0706 GMT
 COUNTRY      FX RIC      FX       FX     INDEX    STOCKS   STOCKS
                          DAILY %  YTD %           DAILY %  YTD %
 Japan                      -0.03  +2.31              0.74   -1.06
 China                      -0.04  +1.85              0.75    6.85
 India                      -0.04  -2.86              0.11   -5.81
 Indonesia                  -0.40  -6.72              2.19  -20.65
 Malaysia                   +0.19  -1.56              0.13   -6.09
 Philippines                +0.04  +4.30              1.11  -23.64
 S.Korea                    -0.17  -2.57              0.01    9.06
 Singapore                  +0.23  -1.62             -0.37  -22.96
 Taiwan                     +0.84  +2.85             -0.12    5.66
 Thailand                   -0.03  -4.47             -0.03  -18.32
 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by
Patrick Graham and Amy Caren Daniel)

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