Jakarta stocks eased on Tuesday after rallying to their highest level since the Asian financial crisis the previous day, pulled down by late profit taking.
Dealers said it was a healthy correction after the index gained nearly five percent in the first two trading days of the year, boosted by fresh liquidity inflows amid optimism about the country's economic picture.
Indonesian stocks gained 62.8 percent last year, the fourth best performing index in the region.
On Tuesday, the composite index opened higher, rising to an intra day high at 738.16 points before closing down 1.48 points, or 0.2 percent, at 723.99 points.
Turnover was extremely heavy at around 1.66 trillion rupiah ($199.3 million), compared to normal 2003 daily trade of well below one trillion. Losers led gainers 91 to 59 while 76 shares were flat.
"It's a healthy correction as many stocks are overbought. Sellers were mostly local players," said a local dealer.
He said the sharp rise in market turnover was due to many stocks having reached all time highs, pushing up market capitalisation.
Bucking the trend, telecommunications stocks continued their gains amid expectations the cellular market has room for strong growth this year.
That growth is seen being led by top firms PT Telekomunikasi Indonesia Tbk (Telkom) and PT Indonesian Satellite Corp Tbk (Indosat).
On Monday, Telkom and Indosat said they expected strong profits and sales this year. They forecast their 2004 revenues would grow some 20 percent and 25 percent respectively.
Telkom, the largest firm by market value on the Jakarta bourse, rose 3.31 percent to end at 7,800 rupiah, a new record high. Indosat jumped 3.80 percent to 16,400 rupiah, its highest close since early 2000.
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