Indonesian shares end down on news of fuel price hike plan<\/p>\n
Dow Jones, Jakarta<\/p>\n
Indonesian shares ended lower Thursday, hurt by news that the
\ngovernment plans a single, sharp increase in fuel prices early
\nnext year, dealers said.<\/p>\n
Sri Mulyani Indrawati, minister for national development
\nplanning, told the Asian Wall Street Journal that the price
\nincrease would probably occur between early February and April,
\nwhen Indonesia's seasonal inflation pressures are low because of
\nagricultural harvesting.<\/p>\n
But analysts said higher fuel prices could exacerbate
\ninflation and hurt companies.<\/p>\n
Dealers also attributed selling to worries that the central
\nbank may further lift interest rates to stem rising inflation.<\/p>\n
\"These negative factors are a good excuse for mid-term
\ninvestors to take profits,\" said an analyst with Kuo Capital
\nSecurities. The main index has risen around 38 percent since the
\nstart of the year.<\/p>\n
The Jakarta Stock Exchange Composite Index ended down 15.423
\npoints, or 1.6 percent, at 963.797.<\/p>\n
Decliners led gainers 113 to 31, with 74 stocks unchanged.<\/p>\n
Volume was 1.75 billion shares valued at Rp 1.5 trillion,
\ncompared with 3.9 billion shares valued at Rp 2.8 trillion
\nWednesday.<\/p>\n
Bellwether Telekomunikasi Indonesia led the decliners, falling
\n3 percent to Rp 4,900 and its rival Indosat ended down 1.7
\npercent, at Rp 5,750.<\/p>\n
Dealers said concerns about higher interest rates spurred
\ninvestors to continue to sell bank stocks.<\/p>\n
The central bank Wednesday raised the interest rate on its
\nbenchmark one-month Bank Indonesia notes to 7.43 percent from
\n7.41 percent. Higher interest rates could raise banks' interest
\ncosts and hurt their overall financial performance, analysts
\nsaid.<\/p>\n
Bank Danamon fell 3.4 percent to Rp 4,225, Bank Mandiri
\ndropped 2.6 percent to Rp 1,900 and Bank Negara lost 1.6 percent
\nto Rp 1,525.<\/p>\n
Dealers said they expect the market to trade lower Friday.<\/p>\n
Meanwhile, the rupiah ended higher, as investors consolidated
\ntheir positions after a recent sharp rise in the dollar, dealers
\nsaid.<\/p>\n
The dollar ended at Rp 9,150, down from its close at Rp 9,195
\nWednesday, an 11-week high.<\/p>\n
\"Many players consolidated their positions after the dollar
\nentered an overbought area,\" said a trader with a foreign bank.<\/p>\n
The dollar hit an intraday high of Rp 9,208.<\/p>\n
He said foreign investors, mostly from Singapore, also sold
\nthe dollar to realize profits after its rally Wednesday.<\/p>\n
Dealers said growing demand for the greenback from local
\nimporters for bill payments, however, put a brake on the rupiah's
\nrise.<\/p>\n
They expect the dollar to trade between Rp 9,125 and Rp 9,175
\nFriday.<\/p>",
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