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hare prices on the Indonesia Stock Exchange (IDX) continued to spiral downward on Thursday under adverse regional sentiments stirred by speculation that the US Federal Reserve would refrain from a stimulus to catalyze the economy.

The Jakarta Composite Index (JCI) slid nearly 1.7 percent to 4025.58 at the close of the trading, recording the sharpest loss since July 23 and the largest decline in Asia in the day.

Reza Priambada, an analyst at PT Indosurya Asset Management, attributed the index’s deep dive to “the response of traders to negative sentiments in the Asian markets”.

 “The Asian markets have adopted a wait-and-see approach as the Fed convenes with all central bank governors at the end of this week,” Reza added.

US Federal chairman Ben Bernanke will preside over an economic symposium in Jackson Hole, Wyoming, on Friday. He is expected to speak on the US economy, including the possibility of a third stimulus, or quantitative easing.

However, market watchers doubt that Bernanke would make such a move considering the better than expected data, including US housing figures, released on Wednesday. Reza added that doubts on a stimulus, which many regional markets desired, was what had dragged down the Jakarta index more than local market factors. According to Reza, the majority of the investors in the Indonesian market were foreigners, making them more susceptible to regional sentiments.

“Based on data from the investment coordinating board [Bapepam-LK], 60 percent of investors are foreigners, with the rest being locals. Thus, we feel the heat once these foreign investors respond negatively to the regional stock market,” he said.

He further added that the sinking of big cap stocks, such as those belonging to PT Bumi Resources (BUMI), had little to do with the day’s slump.

Several big cap stocks have gone down, including the stocks of BUMI, which continued to weaken, losing another 6 percent to Rp 630, the lowest level since 2009.

“However, the weakening of BUMI does not necessarily mean the market will lose steam,” he said.

The commodity market has also been bearish. Stocks in the mining sector fell 1.75 percent while those in the agriculture sector dropped by 0.9 percent.

Muhammad Alfatih, an analyst from PT Samuel Sekuritas, added that global factors — speculation that Bernanke “may not give a third quantitative easing” — was bad for commodities, which was a key contributor to the Indonesian economy.

“Bernanke’s statement and impact on the global price of commodities and the weight of commodity-based stocks in our market is quite large. Thus, Bernanke’s statement will be of importance to us as well,” he told The Jakarta Post.

Most Southeast Asian stock markets fell on Thursday after a subdued session as investors were cautious ahead of Bernanke’s speech, Reuters reported.

In the Philippines, a weaker-than-expected GDP growth for the second quarter dented broader sentiment. The main index eased 0.9 percent on the day.

Bucking the trend, the Ho Chi Minh Stock Exchange’s VN Index advanced for a second session, ending up at 1.1 percent. Last week’s arrests of Asia Commercial Bank’s executives have spurred fears of banking risks but investor confidence has been somewhat restored after Standard & Poor’s said the problem at a Vietnamese bank was not contagious.