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Indonesia: Stocks pare losses after biggest decline
[JAKARTA] Indonesian stocks erased almost all its earlier losses, following the benchmark index's biggest rout since 2013.
The Jakarta Composite Index fell 0.1 per cent to 5,242.16 after slumping as much as 1.5 per cent. The gauge tumbled 3.5 per cent on Monday as palm oil producer PT Astra Agro Lestari reported an 80 per cent drop in three-months profit and international condemnation mounted about the government's plan to execute convicted drug smugglers as early as Tuesday.
"People have been anticipating a slowdown but recent earnings results suggest it's worse than people expected," said Arief Wana, Jakarta-based director at PT Ashmore Asset Management Indonesia. "We have been raising our cash holdings." Global funds have been net sellers of Indonesian stocks for all but two of the past 14 trading days after the stock gauge climbed to a record this month. The index is up 0.3 per cent this year, lagging behind an 11 per cent gain by the MSCI Emerging Markets Index. Foreign investors sold net of $140 million of the nation's equities on Tuesday.
The Jakarta Composite's relative strength index fell to 29.9 on Tuesday, below the 30 level that signals stocks are oversold to some investors.