Indonesian stocks, currency drop on Surabaya bombing


JAKARTA • Indonesia’s stocks and currency fell yesterday after a fresh explosion rocked the main police office at Surabaya, a city that was hit by a series of bombings a day earlier.

The Jakarta Composite Index fell as much as 1.7% before closing 0.2% lower and the rupiah retreated 0.1% to 13,970 to a dollar. The bomb exploded near the headquarters of Surabaya police. At least 10 people, including four police officers were injured in the blast, the Associated Press reported.

At least 14 people, including six suicide bombers were killed and dozens injured in three separate bombings at churches in Surabaya on Sunday, according to police. The Islamic State group claimed responsibility for the attack that was carried out by six members of a family, the Jakarta Post reported.

The bombings are certain to worsen market sentiment already hit by a sell-off in the currency, bonds and stocks triggered by exit of foreign investors from emerging markets amid a rising dollar and US Treasury. While the rupiah tumbled last week to the lowest since December 2015, the yield on benchmark 10-year rupiah bonds jumped to a 13-month high.

“The terror attacks will hamper the already fragile investment sentiment in Indonesia, and we are witnessing it right now,” said Taye Shim, head of research at PT Mirae Asset Sekuritas Indonesia. “Given the fragile sentiment, any negative developments will push investors out of the country.”