Indonesian Stocks Rebound as Sovereign Wealth Fund Steps In to Support Market

Indonesian stocks rebounded from an earlier slump, with the country's sovereign wealth fund saying it has been buying local shares. The benchmark Jakarta Composite Index rose as much as 1.8%, after falling 2.7% earlier. The rebound extends gains from the previous two sessions and contrasts with declines across most Asian markets. On Friday, Indonesian stocks suffered their biggest drop in nearly three decades after MSCI warned the country's emerging-market status was at risk. The reversal came after Indonesia's sovereign wealth fund Danantara said it had stepped in to support the market. "Valuations, especially for large banks, are becoming increasingly attractive, but with MSCI-related uncertainty persisting, there is still risk of further selling," said Herditya Wicaksana, an analyst at PT MNC Sekuritas. "That's the dilemma investors face right now."