The Federal Reserve announced on Wednesday that it will further trim its pace of bond purchases by 10 billion U.S. dollars starting February.
The market expected that the Fed will reduce asset purchases by US$10 billion at each meeting to end the program this year, as U.S. economic activity is expanding at a moderate pace, and labor market conditions have shown further improvement.
The index of the Indonesian Stock Exchange (BEI) opened 65.18 points or 1.5 percent lower at 4,351.25 points with index of 45 most liquid stocks down 2.03 percent to 727.39 points.
"Asian markets including BEI suffered a significant correction this morning," Samuel Sekuritas analyst Adrianus Bias said .
Adrianus said the Fed also indicated that the scaling down would continue in the coming months with the progress made in US economic recovery.
The Fed said if further information supports its expectation of labor market and inflation, it will likely reduce the pace of asset purchases at future meetings.
Adrianus said holders of the domestic stocks rising in the previous two days like Bank Mandiri (BMRI), Telekomunikasi Indonesia (TLKM), Indofood CBP Sukses Makmur (ICBP), Indocement (INTP) and Kalbe Farma (KLBF) would likely begin to sell off for profit.
Regional markets such as Hang Seng recorded a 1.59 percent fall in index to 21,788.46 points with Nikkei index down 3.17 percent to 14,895.59 points and that of Straits Times weakening 1.09 percent to 3,014.72 points.(*)
Editor: Heru Purwanto
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