Share prices plunge as profit taking sweeps the market

JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX) plunged on Tuesday in active trading, ending a week-long buying spree.

Stockbrokers said most blue chip stocks fell sharply as jittery investors took profits amid fears of escalating political tension following the bomb blast at Istiqlal Mosque in Jakarta on Monday.

The Composite Index, which breached the psychological 500 barrier on Monday, fell 4.3 percent to end the day at 485.97.

President B.J. Habibie and other political leaders condemned the bombing and asked people to remain calm. However, newspaper reports said a mob attacked a Christian school complex in South Sulawesi.

A senior analyst at state-owned securities company PT Danareksa, however, played down the role of the bombing in Tuesday's stock market plunge.

Danareksa asset management director Joseph Ginting said the fall was due to profit taking, which often takes place following a large jump in share prices.

"Investors are tempted to quickly make a profit after the index surges the previous day. I see that short-term buying on the JSX has gained momentum during the country's political and economic uncertainties," Joseph said.

He said foreign investors had renewed confidence in the local stock market, leaving local investors behind.

"Recent buying on the JSX by foreign investors is a signal that they are stealing the start," he said.

Joseph said the portion of shares bought by foreign investors had returned to above 50 percent from the 40 percent level.

According to data, foreign investors' net buying as of March 31 had increased by 1.7 percent to US$1.52 billion compared to last year, he said.

He attributed the more active foreign traders to the fact that local traders failed to see the good fundamentals of the stock market because of a lack of attention to the data.

Joseph said the 10 percent increase to Rp 170 trillion in market capitalization in the first quarter of the year reflected an improved sentiment about the market.

Other measures for the increase should also be taken into account, including the smooth start of the bank restructuring program, the operation of the bankruptcy law and the implementation of the $2.4 billion Miyazawa Plan, as well as additional loan commitments by other international financial organizations, Joseph said.

Other Asian stock markets also paused for breath on Tuesday as investors took profits after stretching a liquidity-driven regional rally into the third week, dealers said.

In Tokyo, share prices bounced back as investors bought on dips in late trading after the market slipped following a decline on New York's technology-heavy Nasdaq index, brokers said.

The Nikkei average of 225 leading issues closed 22.90 points higher, or 0.1 percent, at 16,697.11. But the Topix index of all issues on the first section was still down 3.79 points at 1,328.90.

In Hong Kong, stocks closed down 2.8 percent on profit taking following weakness on Wall Street and a key government land auction.

The blue chip Hang Seng Index ended down 356.66 points at 12,409.78.

In Sydney, Australian share prices ended a five-day record- breaking run, easing 0.7 percent in line with a weaker Wall Street, brokers said.

The Australian Stock Exchange's benchmark All Ordinaries Index slipped 23.0 points to 3,090.1.

In Kuala Lumpur, the composite index rose 6.11 points to finish at 621.53, off an earlier low of 609.92.

In Bangkok, the Stock Exchange of Thailand (SET) main index lost 6.08 points to close at 406.11 while the select SET-50 index fell 0.54 points to 30.57.

In Manila, the Philippines Stock Exchange composite index gained 2.67 points to close at 2,358.65.

In Seoul, the Korea Stock Exchange main index rose 3.84 points to 770.43, off a high of 780.73 and a low of 759.81.

In Taipei, the Taiwan Stock Exchange weighted price index edged up 4.56 points to 7,627.74.

In Shanghai, the Shanghai Stock Exchange's B-share index, which tracks shares nominally reserved for foreigners, gained 0.14 points to close at 27.40. The A-share index of locally traded stocks ended up 12.96 points, or 1.1 percent, closing at 1,246.88.

In Auckland, the NZSE-40 capital index closed down 20.77 points at 2,192.04.