Rupiah flirts with 8,000 level to dollar

JAKARTA (JP): The rupiah weakened against the U.S. dollar in moderate trading on Tuesday, breaking briefly through the 8,000 level as fresh year-end demand hit the market.

Currency dealers said bearish sentiment on other regional currency markets coupled with fresh dollar demand by local state banks put the rupiah under severe pressure.

The rupiah, which was traded in a narrow range of between 7,950 and 8,100, ultimately closed at 8,000, unchanged from the day before, dealers said.

"But minor intervention by the central bank reversed the rupiah's declining trend," a chief dealer with a local private bank said.

Dealers said several state banks sold dollars for the rupiah when the local unit was trading at the 7,900 to 8,100 level.

Share prices on the local market also fell on Tuesday due to the absence of fresh leads ahead of the year-end holiday.

The Jakarta Stock Exchange (JSX) composite index fell 0.8 percent (3.44 points) to 396.73 on a total turnover of 102.32 million shares valued at Rp 88.09 billion.

Losers outpaced gainers by 50 to 35, with 85 stocks unchanged.

Stockbrokers said that bearish sentiment in the regional equity market further dampened investor sentiment in the local hammered bourse.

"Overall market sentiment is still gloomy as investors are still in their holiday mood," said Imelda Kwan, an institutional sales broker with Trimegah Securindolestari.

Stockbrokers noted that some foreign brokerage firms absent from the local market in the past few days returned to the bourse on Tuesday.

Jardine Fleming Nusantara, ING Barings Securities Indonesia, SBC Warburg and Vickers Ballas Tamara were among the net sellers while ABN Amro and Credit Lyonnais Indonesia were on the buying side, brokers said.

Analysts said share prices in the local stock market would continue their declining trend in the last trading day this year as most investors were reluctant to reenter the local bourse.

"I doubt if there is any interest by investors in the last trading day of this year," an analyst with a local securities firm said.

Wednesday is the last trading day on the local financial market. It is closed on Thursday and Friday for the New Year's holiday and will reopen on Monday.

Securities analysts and brokers said that bearish sentiment in the local market would likely continue until the second week of January until many investors returned from the long break. (aly)