Stocks up after nightmare run, rupiah down<\/p>\n
Rendi A. Witular, Jakarta<\/p>\n
After experiencing sharp losses a day earlier, the Jakarta
\nStock Market ended slightly higher by 1.15 percent on Tuesday as
\nbargain hunters purchased shares amid gains at other Asian
\nbourses.<\/p>\n
The Jakarta Composite Index ended up 7.675 points to 676.152,
\nfrom a day high of 683.259. Volume was 1.73 billion shares worth
\nRp 1.17 trillion (US$130 million).<\/p>\n
Heavyweight state telecommunications firm PT Telkom led gains
\nin selected blue chips, as it ended higher by Rp 100 to Rp 6,700.
\nIts rival PT Indosat also gained Rp 50 to end at Rp 3,325.<\/p>\n
Automotive kingpin PT Astra International rose by Rp 300 to Rp
\n5,400, while cigarette producer PT Gudang Garam surged by Rp 100
\nto Rp 12,950.<\/p>\n
Stock analyst Arwani Pranadjaya of Mandiri Securities said
\nthat gains in regional markets had encouraged local bargain
\nhunters to step into the market following recent losses, which
\nmade local stock prices considerably low.<\/p>\n
"I may say that it was not a rebound, because the increase was
\nnot that significant compared to the huge losses on Monday. It
\nwas just bargain hunting and consolidation. The market was still
\ncautious over unfavorable global sentiment," said Arwani.<\/p>\n
He explained that jitters over rising inflation at home
\nfollowing the weakening of the rupiah and the rising of oil
\nprices, which may burden local manufacturers, would remain a
\nbarrier for the Index to rise in the next couple of weeks.<\/p>\n
The prospects of higher interest rates in the U.S. and a
\nslowdown in China's economy as the latter struggles to cool down
\nan overheating economy will put further pressure on the stock
\nmarket, he said.<\/p>\n
The combination of the aforementioned economic issues coupled
\nwith political uncertainty ahead of the July presidential
\nelection caused heavy losses in the Index on Monday, as it
\ntumbled by 7.5 percent, the biggest one-day decline in the
\nhistory of the Index.<\/p>\n
Meanwhile in Japan, Tokyo's Nikkei Stock Average of 225 issues
\nsurged 206.04 points, or 1.96 percent, to 10,711.09 after the
\nJapanese government said gross domestic product had risen by 1.4
\npercent in the first quarter of this year, higher than analysts
\nprojected.<\/p>\n
Hong Kong's Hang Seng Index surged 104.74 points, or 0.95
\npercent, to 11,072.39.<\/p>\n
Elsewhere, the rupiah failed to track down gains in the stock
\nmarket as it ended lower against the U.S. dollar following panic
\nbuying by the corporate sector due to jitters caused by
\npolitical, security and economic uncertainty at home and the
\nstrengthening of the greenback against most regional currencies.<\/p>\n
The rupiah closed at Rp 9,070 to the dollar, down from Rp
\n9,010 on Monday.<\/p>\n
Director of Currency Management Group Farial Anwar said many
\ncorporations had decided to keep their dollars because they
\nfeared that the rupiah's depreciation would last for a long
\nperiod of time, thus burdening their costs for imported materials
\nand dollar-denominated debts.<\/p>\n
"Panic buying by the corporate sector has weakened the rupiah.
\nThey seem to dismiss the recent comments by central bank
\nofficials that the weakening of the rupiah is temporary, and
\nindeed I agree with them," said Farial.<\/p>",
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