Jakarta. Indonesian shares plummeted on Monday (13/08) in their worst drop in nearly two years as emerging market currencies faced a deep selloff, causing a market rout across Southeast Asia.
The Turkish lira and the Indian rupee plunged to all-time lows on Monday, while the rupiah slid to a near three-year low.
"Emerging markets have very weak current-account balance, which would have very negative impact," said Taye Shim, head of research at Jakarta-based Mirae Asset Sekuritas.
"That is prompting investors to reassess their investment thesis on emerging markets as we really don't know how it is going to play out."
The lira has lost about 45 percent of its value against the dollar this year, largely over worries about President Tayyip Erdogan's influence over the economy, his repeated calls for lower interest rates in the face of high inflation and deteriorating ties with the United States.
The lira's drop unnerved global investors, with MSCI's broadest index of Asia-Pacific shares outside Japan shedding as much as 1.6 percent on Monday. Indonesian shares slumped more than 3 percent, marking their steepest intraday percentage drop since November 2016.
The rupiah also plunged 0.9 percent on Monday to its weakest since October 2015, after data showed on Friday that the country's current-account deficit, a major concern for global emerging market investors, swelled to the largest in nearly four years in the second quarter.
Bank Indonesia is intervening to defend the rupiah, a senior official said on Monday. Financials led the losses in the stocks, with Bank Central Asia and Bank Mandiri sliding as much as 3.5 percent and 6.5 percent, respectively.
The index of the country's 45 most liquid stocks dropped nearly 4 percent. The Philippines also plunged by 2 percent, marking its worst drop since June 22.
SM investments Corp dropped over 2.7 percent, while real estate developer Ayala Land fell 3.6 percent.
Singapore shares dropped 1.4 percent to their lowest in nearly four weeks, dragged down largely by financials. Oversea-Chinese Banking Corp fell as much as 2.3 percent while DBS Group Holdings hit a five-week low.
Singapore's economy grew slower than initial estimates in the April-June period on a quarter-on-quarter basis, revised data showed on Monday, as the government flagged a likely moderation in growth in the second half. Thailand was closed for a holiday.