Rupiah ends lower as stocks up 0.4 percent

JAKARTA (JP): The rupiah dipped against the U.S. dollar on Tuesday, but stock prices gained ground in thin trading as the year winds down.

Dealers said trading activities on the currency market slowed as money market players chose the sidelines ahead of Christmas and year-end holiday.

"It was just another bleak trading day on Tuesday with offshore operators totally absent from the local market," a chief dealer with a joint venture bank said.

Dealers said the rupiah, which opened at 7,650, slid further to close at 7,750 on Tuesday on the back of fresh dollar demand by local commercial banks.

"While offshore operators were absent, local banks entered the market to buy dollars," the dealer said. The rupiah closed at 7,650 on Monday.

The dealer said several private commercial banks bought the dollar in efforts either to settle their offshore obligations or finance those of their customers.

Trading volume significantly declined to around US$50 million on Tuesday, compared to the daily $100 million average the previous week.

Dealers said the rupiah was expected to be traded in a narrow range between 7,500 and 7,800 against the dollar in the coming days in the absence of antigovernment protests which occurred almost daily before the Muslim fasting month of Ramadhan.

Unlike the rupiah, share prices edged up 0.4 percent on Tuesday, supported by limited buying orders on second line stocks, especially consumer stocks, ahead of the Christmas and year-end holiday.

The Jakarta Stock Exchange (JSX) main price index ended 1.96 points higher to close at 406.46 on a total turnover of 215.75 million shares changing hands valued at Rp 223.06 billion (US$28.78 million).

Losers led advancers by 50 to 34 with 95 stocks unchanged.

Brokers said a 1 percent increase on Wall Street helped the local share prices to surge in the absence of foreign investors in the local market.

"The rise on Wall Street helped the share prices to rise slightly on Tuesday," said Vonny Juwono, an institutional sales broker with Trimegah Securindolestari.

Brokers said that trading had significantly subsided ahead of the holiday season.

Several blue-chip stocks, which were responsible for the ups and downs of the main price index in the local battered bourse, fell on Tuesday, with state telecommunications firm PT Telkom down by Rp 25 to Rp 2,750 on 1.79 million shares, Indosat by Rp 175 to Rp 10,325 on 555,500 shares, and pulp and paper producer PT Indah Kiat & Paper by Rp 75 to Rp 2,100 on 2.91 million shares.

Head of research of Mashill Jaya Securities Edhi Widjojo said that the absence of foreign investors had caused trading activities to remain lethargic on Tuesday.

"Most foreign investors are on their holidays so trading activities remain bleak."

Brokers said trading volume was expected to decline further ahead of the year-end holiday, with the main benchmark price index falling below the 400-key point to hit 380 in the coming days. (aly)