Jakarta share prices closed 2.87 percent lower on Tuesday in line with regional losses on fears the US Federal Reserve will implement a bigger-than-anticipated rate hike this month, dealers said.
The Jakarta Stock Exchange composite index closed down 36.542 points at 1,236.568 on volume of 1.76 billion shares valued at 1.56 trillion rupiah (164.04 million dollars).
Losers outnumbered gainers 109 to 7, with 39 stocks unchanged. The rupiah dropped to a five-month low of 9,500/9,510 to the dollar from Monday's late afternoon level of 9,417/9,422. Foreign exchange dealers attributed the rupiah's fall to regional currency weakness as the Fed may further hike its key interest rate later this month.
"The question people are asking themselves is what will the Fed do next," said Mega Capital Indonesia analyst Hendry Andrean.
He said with inflation pressure up, there is concern that the Fed may be planning further interest rate hikes after June or that it may implement a steep 50-basis-point hike this month.
Although the weak rupiah also undermined sentiment, investors expect the central bank to intervene to prevent the local currency from further falls, he added.
A rebound in share prices may not occur any time soon given the uncertainty over the direction of US rates, Andrean said.
Among major stocks, Astra International dropped 400 rupiah to 8,750.
Telkom lost 200 to 6,750 while Indosat shed 200 to close at 4,125.
Bank Mandiri was down 60 at 1,530, Bank Rakyat Indonesia was down 100 at 3,675 and Bank Central Asia was down 75 at 3,825.
State gas distributor Perusahaan Gas Negara lost 450 to close at 10,100 and cigarette firm Gudang Garam shed 100 to 9,650.
Coal miner Bukit Asam declined 175 to 3,150 and nickel miner Antam was also down 175 at 3,650.
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