Jakarta, CNBC Indonesia – Bursa Asia closed down at the close of trading Thursday (19/8/2021), after investors responded negatively to the planned tightening of liquidity in the capital market in the monetary policy of the United States (US).
The Nikkei Index closed down 1.1% to 27,281.17, Hong Kong’s Hang Seng fell 2.13% to 25,316.33, China’s Shanghai Composite fell 0.57% to 3,465.55, Singapore’s Straits Times fell 1.42% to 3,086.97, South Korea’s KOSPI tumbled 1.93% to 3,097.83, and the Jakarta Composite Index (JCI) ended down 2.06% to 5,992.32.
Market participants in Asia are worried about the start of tightening market liquidity, which was confirmed after the minutes of the meeting of the US central bank (Federal Reserve / The Fed) were announced in the early hours of this morning Asian time.
The meeting of Uncle Sam’s country central bank colleagues showed policy tapering (reduction of bond purchases in the market by the US central bank) is likely to start this year, as inflation hits the target and the labor market recovery is close to expectations.
“Looking ahead, most participants (Federal Open Market Committee/FOMC) noted that as long as the broad economic recovery matches their expectations, it would be appropriate to undertake a reduction in the value of asset purchases this year,” the minutes read.
Policy to prevent overheating the US economy can simultaneously trigger capital outflow from developing country capital markets, because the liquidity that has been pouring into the US market has drastically reduced so that global market players do not have more capacity to invest in high-risk assets such as developing country stocks (emerging market).
However, Fed officials have so far emphasized that tapering will not necessarily be followed by a tightening of the money supply through an increase in the benchmark interest rate.
In addition, the re -tightening of regulatory oversight in the technology sector in China has also exacerbated the movement of Asian exchanges, especially in China today.
Platform China’s internet should take action against those who spread rumors online and maintain their “area of responsibility”.
On Wednesday (18/8/2021), China’s Ministry of Industry and Information Technology reprimanded at least 43 related applications for violating data transfer rules.
The list includes applications e-reading owned by Alibaba, Tencent’s WeChat and other companies run by travel giant Trip.com, and streamer video, iQiyi.
As a result, shares of Chinese tech giant Alibaba tumbled 5.5% to a record low price of 162 per share. Meanwhile, Tencent shares fell 3.4%, after having jumped 3.3% in the early trading session today, following an optimistic quarterly profit outlook.
“The internet industry in the China region must prepare to face more regulation and uncertainty, and Beijing ultimately wants to forge a long-term sustainable path for the sector,” Tencent said in a phone call. Reuters.
CNBC INDONESIA RESEARCH TEAM
(chd / chd)
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