Jakarta Index down 2.1% on heavy selling

Jakarta Index down 2.1% on heavy selling

Dow Jones, Jakarta

Indonesian shares closed lower Thursday, with investors selling more shares in telecommunication blue chips after the government canceled a hike in telephone tariffs following nationwide protests against the move, dealers said.

The Jakarta Stock Exchange Composite index ended down 2.1 percent, or 8.489 points, at 397.109, off an intraday low of 392.948.

Decliners led gainers 44 to 28, with 77 stocks unchanged.

Volume was 305 million shares valued at Rp 524 billion (US$59 million).

Recently, the government raised fuel prices between 3 percent and 23 percent, telecommunication tariffs by an average 15 percent, and electricity tariffs by 6 percent. However, after two weeks of protests, the government decided late Wednesday to cancel the telecommunication tariff and would re-evaluate the increase in fuel prices and electricity tariffs.

"A fall in Telkom spurred investors to sell other blue chips," said an analyst with Kuo Kapital Rahardja.

Bellwether Telekomunikasi Indonesia ended down 6.9 percent, or Rp 250, at Rp 3,375, after hitting a low of Rp 3,225 intraday.

Indonesian Satellite lost 1.8 percent, or Rp 150, to Rp 8,250.

Analysts don't expect much further selling in the telecommunication blue chips Friday as both companies' fundamentals remain solid even without the rate increase.

A decline on many regional markets after Wall Street's losses overnight also prompted investors to sell shares, dealers said.

Wednesday, the Dow Jones Industrial Average lost 1.4 percent to 8723.18, and the Nasdaq declined 1.5 percent to 1438.80.