Indonesia: Stocks plunge after executions

[JAKARTA] Indonesian stocks suffered a heavy sell-off Wednesday due to disappointing corporate earnings and fears that the execution of seven foreigners by firing squad could affect investor sentiment.

The benchmark Jakarta stock index was down 2.35 per cent in afternoon trade, at 5,118.96 points, after falling more than four percent earlier in the day, and was headed for its biggest loss since August 2013, Bloomberg News reported.

Many companies have reported lower first-quarter profits and analysts said this had contributed greatly to the heavy losses.

"Fund managers and investors were overly optimistic for 2015 growth," David Sumual, an economist from Bank Central Asia, told AFP.

The execution of the foreigners, including two Australians, also weighed on sentiment, with Australia - a major trade partner of Indonesia - taking the unprecedented step of recalling its ambassador and warning bilateral ties had suffered.

The executions were not "foreign investor friendly", Michael Every, head of financial markets research at Rabobank Group in Hong Kong, told Bloomberg.

AFP