In today’s trading U.S. stock futures and the dollar came under pressure, as according to analysts, investors are worried about a shutdown of the U.S. government. Euro too did not fare well as the Italian government is almost on the edge of collapse. Indonesia is poised to end the quarter with the biggest loss since December 2008.
Indonesia’s weak rupiah helped spur risk aversion and its main share index was down 1.3 percent; thus, it saw extending a drop by 3.5 percent on the previous week and lost more than 9 percent so far in the July-September quarter. This season in this region has been the worst performer so far.
The Thai SET index followed the Indonesian index and was close to it in terms of worst performer as it slid 2 percent and is on track for a quarterly loss of around 4 percent. According to traders, shares of banks such as Kasikornbank and Krung Thai Bank are continuing their losing streak from last week.
Foreign Outflow is a Concern
Major problem for the economies of Indonesia and Thailand is that foreign outflow is continuing. Market analysts admit that foreign outflows will continue in the near-term and investors are defensive. They are also monitoring if the U.S. Congress can avert a government shutdown.
Analysts reveal that trading volume too was relatively thin across exchanges as traders are waiting for the economic data this week e.g. September inflation of Indonesia, a major indicator of the monetary policy and interest rate outlook that could affect fund flows in the country.
Indian Stocks Fall
India stocks are following the trend in the Southeast Asian market. In today’s trading the benchmark BSE index fell 0.95 percent and the broader NSE index declined 0.96 percent, tracking a decline in regional shares. Even government bonds did not fare well and the benchmark 10-year bond yield was down 2 basis points at 8.69 percent.
Australian Stocks on a High
In today’s trading Australian stocks posted the biggest quarterly gain in four years. Australia’s S&P/ASX 200 Index (AS51) surged 8.7 percent this quarter. It was made possible by record-low interest rates as the Reserve Bank of Australia cut its benchmark interest rate to a record low last month. The central bank signaled it’s willing to reduce borrowing costs further to weaken the currency and spur expansion in the $1.5 trillion economy.
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