Jakarta stock market seen headed for correction

Jakarta stock market seen headed for correction

Agence France-Presse, Jakarta

Indonesia's stock market, which rose a heady 3.7 percent in the past week, is due for a correction in the coming week, an analyst said over the weekend.

"I expect the market to consolidate next week because the index has gone up 30 points over the past three days. So there is a positive chance for a correction next week led by blue chips," said Niaga Securities analyst Vera Marpaung.

The Jakarta Stock Exchange composite index ended the week up 22.956 points at 644.818.

Daily average volume was 2.03 billion shares valued at Rp 923.09 billion (US$110.19 million) compared with 1.08 billion shares worth Rp 629.36 billion the previous week.

Dealers also said Wall Street gains kindled interest in the region.

Share prices in Tokyo are expected to rise this week on the back of climbing Wall Street stocks, though the yen-dollar rate created uncertainty.

Investors will keep their eyes on what U.S. President George W. Bush will say when he visits Tokyo on Friday, they said.

"Wall Street shares are climbing steadily with a number of U.S. indicators pointing to the U.S. economic recovery ahead of the Christmas shopping season. Against that background, investors should return to the Tokyo market soon," said Masayoshi Yano, market analyst at Tokai Toyo Securities.

The Tokyo Stock Exchange's Nikkei-225 index gained 76.75 points or 0.72 percent on the week to close at 10,786.04. The headline index shot up 254.60 points last week as foreigners bought up banking and high-tech shares.

Hong Kong stocks are tipped to extend their gains this week led by telecoms stocks as continued positive investor sentiment could see the market to test the 12,000 points level, dealers said.

The key Hang Seng index gained 327.11 points or 2.82 percent to close the week at 11,935.83.

The South Korean stock market is likely to be volatile this week after rising too high over too short a period in the past week.

The index rose 2.95 percent last week alone to close at 757.89 points as Samsung Electronics, financial and other large-cap stocks drew strong interest from foreign investors after gains on Wall Street.

Compared with a week earlier, the index gained 6 percent. Average trade volume was 423 million shares worth 2.24 trillion won ($1.95 billion), compared with 420.65 million shares worth 1.98 trillion won a week earlier.

Taiwan shares are expected to keep rising to test 6,000 points with strong support from financial stocks after successfully breaking through the 5,800 points barrier.

Continuing foreign interest and Wall Street gains stimulated the market this week, with daily turnover coming in between NT$102.27 billion ($3.03 billion) and NT$125.2 billion.

The weighted index gained 121.98 points or 2.12 percent to finish the week at a new high for the year of 5,869.88 points on Thursday, after a 1.73 percent rise the previous week.

Thai stock market is expected to be boosted by a strong banking and finance sector, but profit-taking could hit after recent strong gains.

The Stock Exchange of Thailand composite index soared 23.81 points or 4.26 percent in the past week to close on Friday at 582.15.

Singapore share prices are expected to trade lower this week as focus shifts to second-line stocks and investors take profit after sharp gains this week.

The Straits Times Index closed at 1,746.04 last week, up 75.74 points or 4.53 percent from the previous week.

Dealers said investors are likely to shift their attention from blue chips to smaller stocks, while others should be selling for profit.

Over the past week, average daily volume totaled 1.590 billion shares worth S$1.124 billion ($650.25 million), up from 1.234 billion shares valued at S$835.36 million the week before.