Indonesian stocks experienced further decline, and the rupiah weakened due to concerns over centralized economic decision-making following the transfer of ownership of key state firms to a new sovereign wealth fund. The Jakarta Composite Index dropped by the most in almost a week, while the rupiah depreciated against the dollar, nearing its lowest level since 1998. The government's move to shift ownership of state companies to the new fund, Danantara, including PT Telkom Indonesia and PT Krakatau Steel, unsettled investors and contributed to the market selloff.

Investors are apprehensive about President Prabowo's economic policies, leading to uncertainty and a negative impact on the investment climate. Danantara is set to announce its management team soon, adding to investors' interest. The recent market slump is reminiscent of a previous decline in March, which triggered trading halts. With the approaching long public holiday, trading activity is expected to be subdued later in the week, making the current period relatively active. Furthermore, yields on Indonesia's government bonds rose, resulting in an increased risk premium compared to US counterparts.