Indonesian share prices closed 2.8 percent lower on Friday as investors sold off across the board in a knee-jerk reaction to the sharp fall on Wall Street overnight, dealers said. The Jakarta Stock Exchange composite index fell 66.85 points at 2,298.41 on volume of 7.19 billion shares worth 6.3 trillion rupiah (691.70 million dollars).
Declines led gains 197 to 44, with 30 stocks unchanged. For the week, the index lost 67.98 points or 2.9 percent. The Indonesian rupiah was at 9,185/9,195 to the dollar, off an intraday low of 9,255 and compared to 9,125/9,135 late Thursday.
BNI Securities technical analyst Muhamad Alfatih said the fall was one of the biggest single-day falls in percentage points since January 10, 2007. On that day, the main index fell 70.514 points or 3.96 percent in reaction to the Thai government's move to limit foreign ownership in strategic industries.
"Normally after a huge correction like this, the market would bounce back much quicker than if the fall were gradual," he said. "I think some people became panicky after seeing Wall Street fall," Valbury Securities analyst Krishna Dwi Setiawan said.
He said the losses in US stocks indicate that the weakness in the US housing market could be worse than previously feared after the US Commerce Department issued another disappointing home sales report.
Amcapital Indonesia analyst Bagus Hananto said Wall Street just happened to fall when investors here were looking for a good reason to sell, following the market's strong run over the past month. But many people did not expect that the fall on the main index today would be that big, he said.
However, there is a possibility for the market to manage a rebound next week as leading companies announce their first half results. Index heavyweight Telkom lost 300 rupiah or 2.8 percent to 10,450 while its rival Indosat dropped 150 rupiah or 2.0 percent to 7,050.
Astra International dropped 700 rupiah or 3.7 percent to 18,150, Gudang Garam fell 200 rupiah or 1.9 percent to 11,000 and Bank Mandiri lost 200 rupiah or 5.3 percent to 3,525.
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