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Indonesia stocks, rupiah weaken on consumer confidence ‘reality check’

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Indonesian shares dropped 1.7% to

hit a three-week low and the rupiah weakened on Wednesday after

data showed consumer confidence in Southeast Asia’s most

populous nation fell last month even though some COVID-19 curbs

were eased.

Other equities in the region came under pressure from

concerns over slowing economic growth in the United States,

while emerging Asian currencies broadly weakened against a

stronger dollar, with Thailand’s baht and South Korea’s

won leading losses.

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In Jakarta, a central bank survey showed the consumer

confidence index fell further in August to 77.3, compared with

80.2 in the previous month. The rupiah fell 0.4%.

“What we are seeing at the moment is a bit of reality check.

There is still an element of risk aversion out there,” said

Mitul Kotecha, Chief EM Asia & Europe strategist at TD

Securities.

The survey overshadowed some relief on the pandemic front

for Indonesia, whose daily coronavirus positivity rate dropped

below the World Health Organization’s benchmark for the first

time on Tuesday.

“Though cases have come down, there is still caution amongst

consumers and retailers and that is dragging down consumer

confidence, which in turn is weighing on markets in Indonesia,”

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Kotecha said.

In Malaysia, the ringgit and stocks both

dipped a day before the central bank’s policy decision.

A Reuters survey showed that Bank Negara Malaysia is

expected to leave interest rates unchanged at 1.75%, as the

country gradually reopens its economy amid a ramped-up COVID-19

vaccination drive.

Thailand’s baht, the region’s worst performing

currency this year, dropped 0.6% as the greenback hovered

near a one-week peak. South Korea’s won weakened 0.8%.

A weaker overnight session on Wall Street hurt stocks in the

region, with Singapore, South Korea and Taiwan

shedding between 0.8% and 1.2%.

Equities in South Korea dropped for a second straight

session, as regulatory risks hurt technology heavyweights and

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investors evaluated the risk of a slower recovery from the

pandemic as local cases surged.

HIGHLIGHTS

** Indonesian 10-year benchmark yields are up 2.4 basis

points at 6.141%​​

** Top loser on the Jakarta stock index was Boston

Furniture Industries Tbk PT, down 8.96%

** Taiwan stocks close 0.9% lower, their lowest

since August 27

Asia stock indexes and

currencies at 0725 GMT

COUNTRY FX RIC FX FX INDE STOCKS STOCK

DAILY YTD % X DAILY S YTD

% % %

Japan +0.06 -6.32 <.n2>

China EC>

India -0.18 -0.66 <.ns ei>

Indones -0.39 -1.58 <.jk ia se>

Malaysi -0.05 -3.27 <.kl a se>

Philipp +0.00 -4.27 <.ps ines i>

S.Korea 11>

Singapo -0.04 -1.86 <.st re i>

Taiwan -0.25 +2.67 <.tw ii>

Thailan -0.64 -8.69 <.se d ti>

(Reporting by Harish Sridharan in Bengaluru; Editng by Devika

Syamnath)

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