Jakarta shares end down

Jakarta shares end down

Dow Jones, Jakarta

Indonesian shares ended lower on Wednesday as investors continued to take profit in many banking stocks on renewed worries that the central bank will raise interest rates to combat rising inflation and after the U.S. Federal Reserve hiked its rate, dealers said.

"The market ran out of steam after recent sharp gains," said a trader with a local securities firm.

Dealers said losses in many Asian markets following falls in U.S. stocks also fueled selling. The Dow Jones Industrial Average lost 0.9 percent while the tech-laden Nasdaq Composite Index fell 0.91 percent on Tuesday.

The Jakarta Stock Exchange Composite Index ended down 10.453 points, or 0.9 percent, at 1142.15.

The main index ended at a record closing high on Tuesday.

Decliners led gainers 94 to 42, with 68 stocks unchanged.

Volume was 3 billion shares valued at Rp 2.3 trillion, compared with 2.9 billion shares valued at Rp 2.7 trillion on Tuesday.

Profit-taking affected Bank Mandiri, the nation's largest lender by assets, which fell 2.3 percent to Rp 1,720, while Bank Rakyat Indonesia lost 4 percent to Rp 2,975 and Bank Danamon ended down 2.9 percent at Rp 5,000.

Profit-taking also hit cigarette maker Gudang Garam, which lost 3.1 percent to Rp 17,300, and food company Indofood Sukses Makmur, which fell 4.6 percent to Rp 1,240.

Telekomunikasi Indonesia bucked the trend, rising 1.1 percent to Rp 4,625 on expectations of higher 2004 earnings and Indonesian Satellite gained 2 percent to Rp 5,200 on a rebound.

Dealers expect the market to trade lower on Friday on further profit-taking in bank blue chips.

The rupiah meanwhile, ended slightly higher as dealers locked in profits against the dollar after the U.S. currency failed to keep overnight gains on the Japanese currency, dealers said.

The dollar closed at Rp 9,390, down slightly from its close Tuesday at Rp 9,395.

The greenback touched an earlier high of Rp 9,425 in reaction to a further 25 basis point hike in U.S. interest rates overnight, dealers said.

"Market participants took profit as the market seemed to have been caught long (on dollars)," a dealer with a foreign bank said.

Local exporters were also heard to be selling the dollar in the market, which helped the rupiah.

Bank Indonesia was suspected of selling dollars via state banks. Bank Indonesia's governor said on Tuesday the central bank intervened that day and would continue to do so in the future as necessary.

The central bank usually doesn't confirm specific intervention.

Dealers expect the dollar to trade between Rp 9,370 and Rp 9,400 on Thursday, with the dollar-yen movement expected to continue providing guidance to the local currency market.