Sabtu, 06 Agustus 2011

RI stocks join global market free-fall

Stocks on the Indonesia Stock Exchange (IDX) slumped  5 percent amid bearish sentiment in the global market on concerns over the economic recovery in the United States and Europe.

The benchmark Jakarta Composite Index (JCI) dropped to 3,914.83 at 9:38 a.m. Jakarta time, set for the steepest drop since 2008.

Regional and global markets were also in the red. The United States’ Dow Jones Industrial Average closed down 4.3 percent on Thursday (Friday in Jakarta), London’s Financial Times and Tokyo’s Nikkei index lost 3.4 percent, while Singapore’s Strait Times was down 3.1 percent.

Earlier this week, the US Congress sealed a deal with President Barack Obama’s administration that will increase the country’s debt limit and reduce government spending to its lowest level since the 1950s, in a move that may possibly avoid default possibilities and credit-rating

But markets remain worried that the plan may cut growth in the world’s largest economy.

In other parts of the world, Europe has also been facing troubles, as Italy and Spain may need to be bailed out by other members of the European Union after backing up Greece from a potential default


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