Indonesia stocks jump on relief over less stringent virus curbs in Jakarta


  • Indonesia
  • Monday, 14 Sep 2020

(Sept 14, Reuters): Indonesia stocks rose over 2% on Monday after new Covid-19 restrictions on Jakarta proved less severe than feared, with markets across Asia aided by AstraZeneca resuming trials of its leading vaccine candidate.

South Korean stocks led gains outside Indonesia, rising more than 1% while other markets edged higher ahead of a flurry of potential catalysts this week.

The details of the restrictions in Jakarta laid out over the weekend eased fears of further economic damage, with markets and shopping centres remaining open with only some curbs.

"The terms appear less strict than the market anticipated when it was first announced," Mulya Chandra, Morgan Stanley's head of research for the country, said in a note.

"This could drive the market to recoup last week's losses that were attributed to fear of stricter lockdown protocols," he said, referring to a combined near 3% fall over both Thursday and Friday.

The rupiah, which underpins one of Asia's most popular bond markets for foreign investors and has been under pressure for the past two weeks, dipped 0.1% while 3-year bond yields fell more than 27 basis points ahead of a central bank policy meeting this Thursday.

Fears that a parliamentary panel's recommendations for changes to Bank Indonesia will make it more susceptible to government interference have been at the heart of the currency's recent troubles, at a time when the economy is struggling with a surge in coronavirus numbers.

New daily cases in the country have topped 3,000 for six days running.

"Things are choppy out there. And not just in markets. Economic data in recent months has been all over the map: breath-stopping declines, punchy rebounds," Frederic Neumann, HSBC's co-head of Asian Economics Research wrote in a note to clients.

Currencies were flat to higher against a marginally weaker US dollar, with this week's focus firmly on the US Federal Reserve's policy announcement on Wednesday after the world's major central bank recently shifted its policy stance to lower rates for longer.

Taiwan's dollar advanced the most on the US dollar, followed by South Korea's won strengthening 0.3%.

The Bank of Japan and the Bank of England also announce their respective policy decisions on Thursday. In Tokyo, Japanese Chief Cabinet Secretary Yoshihide Suga was poised to win a ruling party leadership election on Monday, virtually ensuring that he replaces Shinzo Abe this week in the nation's top job.

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stocks , markets , AstraZeneca , vaccine

   

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