The Indonesian rupiah remained close to its all-time low of 18,190 per US dollar, while local shares dropped by over 1% amid investor concerns about MSCI’s potential market classification change and shifting political trends in Brazil.
The rupiah dropped to 18,125 against the dollar, marking an 8% decline for the year so far.
Brazil’s markets were closely watching the aftermath of President Luiz Inácio Lula da Silva’s election win, as Senator Flavio Bolsonaro, backed by many investors, declined to accept defeat.
According to UBS analysts, President Luiz Inácio Lula da Silva’s surprise re-election challenges a Brazilian asset rally driven by expectations of a market-friendly administration.
UBS noted that the President secured 51.8% of valid votes, a result that directly challenges the rally driven by expectations for a market-friendly administration following Senator Flavio Bolsonaro’s first-round victory.
Indonesia’s Jakarta Composite Index initially lost more than 1.7% before settling with a smaller decline of roughly 0.9% for the session.
Fesa Wibawa, an Aberdeen Investments portfolio manager, suggested that current market jitters are focused on Indonesia’s stock performance rather than any worsening in the country’s overall economic or credit stability.
The Philippine peso reached a historic low of 63.919 per dollar, down about 8% this year, ranking among the region’s worst-performing currencies alongside the rupiah.
South Korea’s stock market slipped by 1.5% as traders anticipated earnings reports from semiconductor firms SK Hynix and Samsung Electronics later in the week.
Tech-heavy Taiwan was closed for a public holiday, while Philippine stocks and Singapore shares shed 1.5% and 0.3%, respectively.
Thailand’s benchmark index edged 0.6% higher ahead of the central bank’s policy decision on Wednesday, with markets widely expecting rates to remain unchanged for a fourth consecutive meeting.
