Indonesian stocks soar 7 pct to 2-1/2 mth high on Fed relief, rupiah jumps
JAKARTA, Sept 19 - Indonesian shares surged 7 percent to a 2-1/2-month high on Thursday, leading a relief rally in emerging Asian markets after the U.S. Federal Reserve stunned investors by deciding not to commence cutting its massive stimulus.
U.S. stocks soared to a fresh record high overnight, pushing MSCI's broadest index of Asia-Pacific shares outside Japan up 0.9 percent to its highest in almost four months.
"We believe the implication (of the Fed's decision) will be positive for Indonesia's financial condition and the rupiah," Mandiri Sekuritas said in a note to clients.
The Jakarta index was up 4.4 percent at 4,658.6 at 0254 GMT, after earlier hitting 4,576.6, the highest level since July 3.
The rupiah surged 2.3 percent against the dollar to 11,200 per dollar at 0116 GMT.
"I think some short covering made the early fantastic rally. People who were short selling the market expecting QE tapering were buying back shares," said Jemmy Paul, head of equity at Sucorinvest Asset Management in Jakarta.
The Fed defied investor expectations on Wednesday by postponing the start of the wind down of its massive monetary stimulus, saying it wanted to wait for more evidence of solid economic growth.
The U.S. central bank's unexpected decision to delay a cut to its massive bond-buying programme, which have flooded global markets with cheap dollars and underpinned riskier assets in recent years, provided a lease of life for some of the more vulnerable emerging markets.
Stocks and currencies in Indonesia and India in particular have been hard hit in recent months as underlying worries over yawning current account deficits were further exacerbated by concerns about an exodus of capital.
State-owned lenders Bank Rakyat Indonesia and Bank Mandiri jumped more than 8 percent each. The big caps index soared 10 percent to 827.5 on it's opening.
Elsewhere, car maker Astra International rose as much as 11 pct to 7,500 rupiah, while telecommunications provider PT Telkom Indonesia <TLKM > jumped 10 percent to 2,450 rupiah.
(Reporting by Andjarsari Paramaditha and Viparat Jantraprap,; Editing by Shri Navaratnam)
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