Jakarta shares end lower on selling in Astra, bank stocks
Jakarta shares end lower on selling in Astra, bank stocks
Dow Jones, Jakarta
Indonesian shares ended lower on Monday on selling in carmaker Astra International and many bank stocks because of worries over rising interest rates, dealers said.
"We had many negative factors that discouraged investors here. In particular, investors sold shares that are sensitive to interest rate and currency movements," said a trader with a foreign securities firm.
He also said many investors were on the sidelines given an absence of fresh leads.
Among the main factors hurting trading was unease over last week's announcement by the Central Bank that it will continue to raise interest rates for the remainder of the year to stem inflation.
Dealers said a weaker rupiah against the U.S. dollar also added to negative sentiment.
The Jakarta Stock Exchange Composite Index ended down 2.962 points, or 0.3 percent, at 1,045.15.
Decliners lead gainers 57 to 32, with 60 stocks unchanged.
Volume was 990 million shares valued at Rp 590 billion, compared with 1.2 billion shares valued at Rp 625 billion on Friday.
Astra International lost 2.7 percent to Rp 10,750 on fears that rising interest rates will hurt first half car sales by damping demand for bank loans to buy cars.
Dealers said investors continued to sell their shares in banks on expectations that higher interest rates will reduce banks' net interest margins.
Bank Danamon fell l.1 percent to Rp 4,725, while Bank Negara Indonesia ended 0.6 percent lower at Rp 1,660 and Bank Rakyat Indonesia dropped 0.9 percent to Rp 2,775.
Shares in bellwether Telekomunikasi Indonesia, however, bucked the trend, rising 1.1 percent to Rp 4,600 on renewed expectations that the company will give a higher 2004 dividend.
Dealers said they expect the market to trade higher Wednesday on a rebound, with further gains in Telkom likely to improve overall sentiment.
Meanwhile, the rupiah closed lower on the U.S. dollar's broad strength, with demand from local corporations for debt repayment at the end of the month further depressing the local currency, dealers said.
The dollar closed at Rp 9,470, up from Friday's close at Rp 9,448.
"The rupiah lost ground, although the central bank suspectedly intervened the market," said a trader with a state-owned bank. But despite its intervention, the central bank failed to defend the rupiah, as it only sold a small amount of dollars at Rp 9,460-Rp 9,465.
The market also grew cautious about holding the local unit amid increasing talk of a looming Cabinet reshuffle, which could raise the domestic political temperature.
They expect the dollar to trade between Rp 9,450 and Rp 9,520 on Wednesday.