Jakarta stocks fell in lethargic trade on Thursday, hurt by climbing interest rates while sentiment remained weak ahead of July 5 presidential elections.
The composite index dropped 7.75 points, or 1.09 percent, to close at 700.14 points. Turnover was estimated at a paltry 286.4 billion rupiah ($30.5 million), compared to last month's daily average of 982 billion rupiah. Losers led gainers 64 to 22 while 73 issues were unchanged.
A local dealer predicted the index would hover around its current level in the absence of new catalysts.
Dealers said the sluggish turnover was due to a lack of foreign investor participation amid political uncertainty ahead of elections next month, while retail players, mostly local, shifted their attention to soccer Euro 2004.
"Local players have run out of steam while foreign investors were on the sidelines. The market is directionless," said Yudhistia Susanto, a fund manager at Batavia Prosperindo Aset Manajemen.
The central bank raised the short-term interest rate on its debt paper (SBI) by one basis point to 7.34 percent in an auction on Wednesday, the second consecutive increase amid concerns over inflation and the weakness in the rupiah.
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