Jakarta share prices closed 0.89 percent higher on Thursday, hitting a fresh record on hopes that the economy will get a boost following an interest rate cut by Bank Indonesia this week, dealers said.
The Jakarta Stock Exchange composite index closed up 13.661 points at 1,553.062, notching a fresh record for the fourth straight day. Volume was 3.30 billion shares valued at 3.23 trillion rupiah (369.9 million dollars).
Advancers led decliners 88 to 46, with 77 stocks unchanged.
The rupiah was at 8,730/8,735 to the US dollar compared to Wednesday's level of 8,727/8,732.
"People buy stocks based not on valuations anymore but on the projection of the market," said Danasakti Sekuritas analyst Arief Budisatria.
He said growing confidence over the country's economic prospects has triggered speculation that the main index may hit 1,600 points soon.
The rupiah's steady gains, the interest rate cut this week and news that the government is considering early repayment of the IMF debt are also positive signals, Budisatria said.
He said the US interest rate hike had little impact on trading.
With the rupiah holding on to its strength, investors believe the spread between US and Indonesian interest rates remains attractive, he said.
But Budisatria said a technical correction may be underway as share prices have become expensive after the four-day rally.
Among major stocks, Bank Mandiri added 125 rupiah to 2,550, recovering from recent losses. Bank Rakyat Indonesia was flat at 4,500 and Bank Central Asia added 125 at 4,675.
Telkom lost 100 at 8,300 and Indosat shed 100 at 5,700, both hit by profit-taking after recent gains.
Dealers said investors switched out of Telkom and Indosat to laggards such as Bank Mandiri and property firms.
Car dealer Astra International was flat at 12,100 and state gas distributor Perusahaan Gas Negara was up 150 at 13,850, while cigarette firm Gudang Garam jumped 300.
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