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.