Indonesian share prices closed 0.20 percent higher on Tuesday as mild gains in blue chips and infrastructure-related stocks offset losses elsewhere on the market, nudging the index up to another record close, dealers said. They said weakness in regional markets and the rupiah, as well as investor caution ahead of the US Federal Reserve's meeting on Tuesday and Wednesday, had curbed buying interest.
The Jakarta Stock Exchange composite index closed up 2.097 points at 1,047.532. Volume was 1.84 billion shares valued at 1.40 trillion rupiah (155.5 million dollars).
The rupiah was slightly lower at 9,240/9,250 to the dollar compared to Monday's close of 9,165/9,170. Foreign exchange dealers attributed the rupiah's fall to technical factors and a reaction to higher-than-expected inflation figures for January. Consumer prices in January rose by 1.43 percent from December and 7.32 percent year-on-year, the Central Bureau of Statistics said.
"Regional markets are down, the rupiah has weakened, and investors are cautious ahead of the Fed's meeting," Evergreen Capital analyst Edwin Sebayang said, referring to the Fed's meeting to set interest rates. The new rates will be announced Wednesday.
The Fed is expected to raise its key interest rate by another 0.25 percentage points, which analysts said could add to pressure on Indonesia's central bank to raise its own interest rates.
Sebayang said foreign brokerages continued to switch interest from blue chips such as Telkom to second-liners, in particular, infrastructure-related stocks.
Telkom's gains Tuesday were more due to technical factors, he said.
"There is hope for gains in infrastructure stocks, and property stocks are also starting to attract interest," he said.
Sebayang said although the composite index closed at another record high, trading volume was weak, which indicated the market remained vulnerable to profit-taking in the coming days.
Telkom was up 25 rupiah at 4,825 rupiah, while affiliate Indosat rose 50 rupiah at 5,750.
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