FX.co ★ Indonesia Stocks Set to End Month, Quarter with Steep Losses

Indonesia’s IDX Composite dropped 160 points, or 2.8%, to 5,659 in early trading on Tuesday, falling for a third consecutive session to its lowest level in three weeks. Selling pressure was broad-based across all sectors, with basic materials, energy, and infrastructure among the hardest hit. Prominent losers included Hartadinata Abadi (-8.5%), Astra International (-4.7%), Bank Central Asia (-4.2%), and Aneka Tambang (-3.7%).

The benchmark index is on track for a seventh straight monthly decline, down 7.5% so far, and is heading toward a second consecutive quarterly loss of nearly 20%. Market pressures are being driven by a widening current account and fiscal deficit, a shrinking trade surplus, and foreign exchange reserves at a two-year low, while the rupiah continues to set record lows. May inflation was close to the upper bound of Bank Indonesia’s target range, primarily due to higher food prices.

Investor sentiment was further undermined by new legislation granting sweeping legal immunity for purchases of bonds issued by the state investment fund Danantara, fueling concerns about governance standards and transparency.