Shares end down on profit taking

Shares end down on profit taking

Dow Jones Jakarta

Indonesian shares ended lower on Tuesday led by profit-taking in telecommunications stocks after recent rallies, according to dealers.

Market sentiment, however, remains positive with some dealers expecting a rebound on Wednesday.

The Jakarta Stock Exchange Composite Index ended down 9.054 points, or 0.8 percent, at 1071.15.

Decliners led gainers 110 to 27, with 64 stocks unchanged.

Volume was 1.2 billion valued at Rp 1.1 trillion compared with 1.25 billion shares worth Rp 1.6 trillion on Monday.

"It's a healthy correction," a dealer said. "I think stocks will rebound soon as long as the rupiah doesn't fall sharply again."

The country's largest telephone company Telekomunikasi Indonesia (Telkom) ended down 1.1 percent at Rp 4,600 and its rival Indosat fell 1 percent to Rp 4,800 on profit-taking.

Bank Mandiri was also hit by profit-taking, edging down 2.3 percent to Rp 1,700, while cigarette maker Gudang Garam dropped 4 percent to Rp 14,000.

Dealers expect the market to slowly recover on Wednesday after the index came off its intraday low of 1067.31 earlier on Tuesday.

On the currency market, the rupiah closed higher on capital inflows to the local stock market.

The dollar closed at Rp 9,458, down from its close on Monday at Rp 9,480.

Dealers said foreign investors probably exchanged dollars into the local unit to settle their recent purchases of local stocks.

The local stock market ended 0.8 percent lower on Tuesday after gaining nearly 5 percent since the beginning of the month.

"Speculators also sold the dollar today as they didn't see any strong reason as yet to drive it higher with the central bank remaining resilient in defending the rupiah," a dealer with a foreign bank said.

Bank Indonesia allegedly unloaded dollars via state banks earlier on Tuesday to foil any attempt to push the greenback higher amid its rise against the yen, dealers said.

Dealers expect the dollar to trade between Rp 9,550 and Rp 9,575 on Wednesday.

The market will wait to see if the central bank allows the benchmark weighted rate of its one-month Sertifikat Bank Indonesia notes to rise from 7.81 percent during a weekly auction on Wednesday, making the rupiah more attractive.