Shares end down; fuel price woes spark selling

Shares end down; fuel price woes spark selling

Dow Jones, Jakarta

Indonesian shares ended lower on Monday as worries over the fuel
prices hike spurred investors to continue to take profit, dealers
said.

Higher fuel prices may weaken consumer purchasing power and
push up the operating costs of many companies, thereby hurting
their financial performance.

Analysts say the higher fuel price could also trigger massive
protests and affect the nation's stability.

"Investors consolidated their positions ahead of the fuel
price hike," said a trader with BNI Securities.

The Jakarta Stock Exchange Composite Index ended down 9.548
points, or 0.9 percent, at 1,073.83.

The main index has risen 7.2% since the start of the year.

Decliners led gainers 80 to 37, with 76 stocks unchanged.

Volume was 1.4 billion shares valued at Rp 1.5 trillion,
compared with 3.5 billion shares valued at Rp 2.0 trillion on
Friday.

Cigarette maker Gudang Garam and automotive company Astra
International were among the leading decliners.

Gudang Garam lost 5 percent to Rp 15,400, and Astra
International was 4 percent lower at Rp 10,800 on profit-taking
after sharp gains last week.

Also lower was heavyweight telephone company Telekomunikasi
Indonesia, which fell 1.1 percent to Rp 4,425 after its ADRs in
New York fell 2.4 percent to $19.29 on Friday. Telkom's rival
Indosat dropped 1.9 percent to Rp 5,250 after its ADRs lost 2.6
percent.

Shares of nickel miner International Nickel Indonesia, or
Inco, bucked the trend, rising 2.5 percent to Rp 14,300 on
bargain-hunting.

Dealers expect the market to trade slightly higher on Tuesday
on a rebound.

Meanwhile, the rupiah closed steady in quiet trading as
caution over widespread public protests against the government's
plan to raise domestic fuel prices prevented the local unit from
taking advantage of the dollar's renewed weakness.

The dollar closed at Rp 9,263, unchanged from its close on
Friday. The U.S. currency was trapped in narrow trade of Rp
9,260-Rp 9,269 during the day.

"Market participants mostly stood on the sidelines, waiting to
see the public reaction on the price hike plan," said a dealer
with a foreign bank in Jakarta.

Increasing fuel prices are unpopular in Indonesia, the only
Southeast Asian member of the Organization of Petroleum Exporting
Countries.

Fuel price increases sparked social unrest that in 1998 helped
end ex-president Suharto's more than 30-year rule.

Analysts have said an increase in fuel prices will cause a
sharp shock to inflation, but they generally support the measures
to help reduce the budget deficit to 1 percent of gross domestic
product this year from 1.4 percent last year.