JSX composite index falls

JAKARTA (JP): The Jakarta stock market continued to fall yesterday with the JSX Composite Index tumbling to a three-month low of 633.28 in morning trade.

But the key indicator regained ground in afternoon trade to close at 636.64, down fractionally from 637.42 on Friday.

One broker said trade was unusually low with only 7,600 transactions.

"It represents only one third of the regular daily frequency as many investors stayed sidelined," he said.

Sigma Batara analyst Fadjar L. Soetanto predicted the market would drop further before the May 29 general election.

"It could go down as low as 620," he said.

He said investors were waiting for further drops before buying undervalued stocks.

He said recent troubles like last week's riots in Pekalongan, Central Java, would flood the market with negative sentiment.

Investors were also expecting a further rise in U.S. interest rates on top of the 25 basis point rise which came on March 25, he said.

"Historically, if there has been an increase in U.S. interest rates, another increase will follow in the coming months," he said.

Turnover plummeted to 141.61 million shares from 167,73 million last Friday.

Shares worth Rp 302.27 billion (US$ 127 million) changed hands, down from Rp 342.20 billion.

In the money market, the rupiah was stable against the dollar in late trade as traders stayed long on dollars after the rupiah went reeling last week on rumors about President Soeharto's health.

Dealers said the market had stabilized and the swap rate indicated the central bank slightly easing liquidity.

Spot rupiah prices were 2,405.00/05.25 after opening at 2,404.50/04.85. (09)