Fri, 12 May 2000

Local share prices plunge by 3.5 percent

JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX) plunged amid selling pressure from foreign investors, with the benchmark composite index losing 3.5 percent to close at 529.20 in active trading.

Securities analysts said many investors sold their stocks due to uncertainty in the country's political and economic fronts, and fears over the possible increase in interest rates in the United States.

"The sharp drop in the rupiah during the day also caused a panic selling, giving more pressure to the already weak market," a securities dealer said.

Rupiah plunged steeply Thursday from Wednesday's late trade rate of 8,200-8,210 against the dollar to 8,345-8,355 in late trading.

The analysts said that if the U.S. Federal Reserve raised the interest rate 0.50 percentage point as estimated next week, investing in the Indonesian equity market would certainly no longer be as attractive, especially when the investment risk is high.

Other Asian stock markets also lumped on Thursday, sparked off by recent declines on the U.S. markets, the Associated Press reported.

In Japan, the benchmark 225-issue Nikkei Stock Average plunged 819.01 points, or 4.63 percent, to 16,882.46 points. On Wednesday, the index lost 143.07 points, or 0.80 percent.

Foreign investors, particularly U.S. funds, were dumping Japanese stocks to raise cash following losses on Wall Street Wednesday, traders said.

The Dow Jones industrial average fell 168.97 points to 10,367.78 points. The technology-heavy Nasdaq composite index closed at 3,384.73 points, down 200.28 points.

In currency trading, the U.S. dollar was quoted at 109.92 Japanese yen on late Thursday, up 0.56 yen from late Wednesday in Tokyo and also above its late New York level of 109.39 yen on Wednesday.

In Singapore, the Straits Times Index fell 53.50 points, or 2.6 percent, to 2,003.72, following declines on Wall Street.

In New Zealand, the NZSE-40 capital index fell for a third day, ending down 11.49 points, or 0.6 percent, to 2,020.82. Australia's All Ordinaries Index fell 45.00 points, or 1.5 percent, to 2,966.8.

In Bangkok, Thai shares fell to a 14-month low as investors sold banking and communications stocks, amid weakening regional and U.S. markets, traders said.

The SET Composite Index shed 6.99 points, or 2 percent, to 336.54, the lowest since March 11, 1999.

The Hong Kong and South Korean markets were closed for a public holiday to mark the Buddha's birthday.

In Taipei, Taiwanese shares tumbled to a new low this year as investors sold technology stocks on news that Intel was supplying defective chipsets. The Weighted Stock Price Index fell 209.96 points, or 2.5 percent, to 8,349.91, the lowest since Dec. 24.

In Manila, Philippine shares fell to an 18-month low, as a weakening peso, concerns over a U.S. interest rate increase, and the ongoing fighting between military troops and Muslim rebels in the south hurt investor confidence. The Philippine Stock Exchange Index fell 17.75 points, or 1.2 percent, to 1,505.21.

In Kuala Lumpur, Malaysian shares fell on declining regional and U.S. markets. The Composite Index lost 11.76 points, or 1.3 percent, to 920.71.