Indonesian end lower, led by selling in Astra International

Indonesian end lower, led by selling in Astra International

Dow Jones/Jakarta

Indonesian shares ended lower on Thursday, led by selling of car maker Astra International on concerns of a possible drop in sales, while higher oil prices hurt overall sentiment, dealers said.

Lingering worries over rising domestic interest rates and weak rupiah also kept sentiment very weak, they said.

"Many investors sold on fears higher oil prices could affect the nation's economy as a whole," said a trader with a foreign securities firm.

The Jakarta Stock Exchange's Composite Index ended down 9.409 points, or 0.8 percent , at 1108.403.

Decliners led gainers 92 to 30, with 59 stocks unchanged. Volume was 1.4 billion shares valued at Rp 1.2 trillion, compared with one billion shares valued at Rp 781 billion on Wednesday.

Astra International dropped 3.9 percent to Rp 12,200 on worries that rising interest rates could discourage consumers from buying cars on credit, and the weaker rupiah could increase the cost of imported raw materials.

"These two factors could hurt Astra's sales," said a trader with Paramitra Securities. He said more expensive imported raw materials may force Astra to increase the prices of its cars and motorcycles.

Benchmark one-month Bank Indonesia notes rose Wednesday to 8.44 percent from 8.25 percent previously.

Dealers said investors to continued to sell banking blue chips on lingering worries that higher interest rates could reduce banks' net interest margin and bottom lines.

Bank Danamon lost 3.9 percent to end at Rp 5,050, while Bank Mandiri ended down 0.7 percent at Rp 1,480 and Bank Central Asia lost 1.4 percent to Rp 3,475.

Also lower were shares in Indonesian Satellite, which lost 2.8 percent to close the session at Rp 5,300, on worries the weaker rupiah could the company's debt services. Indosat has sizable dollar-denominated debts.

Dealers said they expect the market to trade Lower Friday on further selling of bank stocks.

The Indonesian rupiah was steady on Thursday, ending off an earlier low on suspected intervention by the central bank, dealers said.

The dollar closed at Rp 9,795, barely changed from Rp 9,790 on Wednesday. The rupiah hit an intraday low of 9,834.

"Several state-owned banks sold the dollar at the 9,830-level to help the rupiah," said a trader with a local bank. He also attributed the rebound of the rupiah to profit taking after the dollar's recent gains.

Dealers said the government's move to directly supply U.S. dollars to the state-owned petroleum firm Pertamina (PTM.YY) reduced the trade volume by almost 25 percent , decreasing the pressure to the rupiah.

The government's direct cash injection into Pertamina is aimed at easing the impact on the rupiah from the company's massive appetite for dollars to fund oil imports.

"The rupiah however failed to continue its uptrend movement as fresh bids from local companies to repay debt remained healthy," said another trader with a foreign bank.

The dollar will likely trade in a range of Rp 9,750 to Rp 9,850 on Friday, dealers said.