Wild ride in stocks, currencies

Uncertainty about Indonesia's future, fears that the yuan may be devalued and losses on Wall Street provoked volatile trading on Asian stock and currency markets yesterday.

Regional currencies fell sharply, led by the Indonesian rupiah, as tension remained high across the crisis-hit archipelago, raising fears that the country might be sliding into chaos, dealers said.

The rupiah breached the 10,000 to the US dollar level before recovering some of its losses in the afternoon as interest rates were raised.

Most regional stock markets closed slightly lower, although shares rose in Jakarta as investors exploited arbitrage opportunities on dual-listed counters opened by the rupiah's renewed weakness.

Technical Data currency analyst Catherine Tan said: 'The rupiah started moving on Wednesday when the Medan riots spread to Jakarta. Confidence in the country is gone. We could easily go back to 15,000.' Medan, the Sumatran town which was the scene of intense anti-government protests and looting earlier this week, was calmer yesterday with troops patrolling the streets in armoured cars and only sporadic looting reported.

A Singapore-based economist said: 'It's been building up for a while. We've seen the [currency] triggers, now we need to see if the Indonesian rate rises have any effect.' Indonesia's armed forces chief General Wiranto denied that there had been any deaths in Medan - as had been reported - and urged students demonstrating elsewhere in the country to stop.