Indonesian Stocks Drop Sharply Amid Inflation and Trade Concerns
Indonesia’s IDX Composite fell 70 points, or 1.4%, to 5,028 in early Tuesday trading, reversing gains in the prior day amid broad-based losses across major sectors, led by energy, infrastructure, basic materials, and property. Sentiment weakened as October food inflation hit a five-month high, due to lingering El Niño-related supply disruptions, despite a slight easing in headline inflation that kept it within the central bank’s target range. Meanwhile, the trade surplus faces continued pressure as imports outpace exports, despite a stronger-than-expected reading in September. In the U.S., stock futures were mixed ahead of the midterm elections and key data releases. Still, losses were limited by a major bourse reform excluding 81 stocks with high shareholding concentration from benchmark index calculations, in response to MSCI's warnings over potential market reclassification. Notable laggards included Medco Energi (-5.1%), Telkom Indonesia (-4.3%), and Bank Tabungan Negara (-3.4%).
Indonesia’s IDX Composite fell 70 points, or 1.4%, to 5,028 in early Tuesday trading, reversing gains in the prior day amid broad-based losses across major sectors, led by energy, infrastructure, basic materials, and property. Sentiment weakened as October food inflation hit a five-month high, due to lingering El Niño-related supply disruptions, despite a slight easing in headline inflation that kept it within the central bank’s target range. Meanwhile, the trade surplus faces continued pressure as imports outpace exports, despite a stronger-than-expected reading in September. In the U.S., stock futures were mixed ahead of the midterm elections and key data releases.
Still, losses were limited by a major bourse reform excluding 81 stocks with high shareholding concentration from benchmark index calculations, in response to MSCI's warnings over potential market reclassification. Notable laggards included Medco Energi (-5.1%), Telkom Indonesia (-4.3%), and Bank Tabungan Negara (-3.4%).