Stocks, rupiah strengthen again after Monday rout

A'an Suryana, The Jakarta Post, Jakarta

Stocks strengthened again here Wednesday as market sentiment, which was terribly shaken early this week following the deadly bomb blast in Bali, improved on the progress made so far in the investigation into the incident.

The Jakarta Stock Index closed at 357.77, up 15.173 points from Tuesday's close at 342.20.

The rupiah, which was significantly lower early this week, also ended firmer at Rp 9,200 against the U.S. dollar, from Rp 9,285 on the previous day.

On Monday, panic selling hit the market, dragging the index to a four-year low of 337.47, while the rupiah, which was stable at the level of 9,000 for weeks before the bomb blast, dropped to 9,330.

The government vowed Wednesday to press ahead with tough new antiterrorism legislation and to form an international investigative team to hunt for those responsible for the Bali bombing, which took more than 180 lives over the weekend.

Analysts said the index was set to further rise over the coming days as buying continued.

"Traders consider stock prices to still be too low," said Zulfikar, a stock analyst with Mandiri Securities.

A total of 1.19 billion shares worth Rp 926.90 billion changed hands on Wednesday.

The rupiah ended firmer on Wednesday, which traders say was owing to intervention by Bank Indonesia. But, the amount of funds injected by the bank into the market remained unclear.

"The intervention will help the rupiah to hover around Rp 9,200 to Rp 9,300," said a currency analyst Wiwan Wiradjaja.

Meanwhile, most Asian stock markets rallied Wednesday, with prices climbing in Tokyo and Hong Kong on the back of four straight sessions of gains on Wall Street.

Japan's 225-issue Nikkei Stock Average rose 48.14 points, or 0.5 percent, to 8884.87.

The Dow Jones Industrial Average gained 4.8 percent overnight and the Nasdaq jumped 5.1 percent.

The Nikkei jumped more than one percent at the opening, but those gains were soon clipped by a gloomy corporate earnings outlook for leading U.S. chip maker Intel. Tuesday, the Nikkei surged 307.12 points, or 3.6 percent.

In currency trading, the U.S. dollar weakened against the yen. The dollar bought 124.38 yen in late trading, down 0.11 yen from late Tuesday in Tokyo, and below its late Tuesday level of 124.77 yen in New York.

Hong Kong stocks took their cue from Wall Street and advanced for a third straight session.

The Hang Seng Index rose 122.75 points, or 1.3 percent, to finish at 9459.14. Tuesday, the index rallied 370.66 points, or 4.1 percent, in its biggest percentage point gain in nearly a year.

In Bangkok, Thai stocks climbed on the sharp U.S. gains and a Fitch Ratings upgrade of the country's top four banks. The Stock Exchange of Thailand Index finished at 332.80, up 4.51 points, or 1.4 percent.

In Singapore, shares closed mixed, but buying by hedge funds sent the Straits Times Index to a higher close at 1439.05, up 9.37 points, or 0.7 percent.