Indonesian share prices closed 0.30 percent lower on Wednesday as investors cashed in on recent gains in selected stocks led by heavyweight Telkom, amid a lack of fresh incentives, dealers said. The composite index closed down 6.751 points at 2,294.591 on volume of 3.2 billion shares worth 3.16 trillion rupiah (348.67 million dollars).
Declines narrowly outnumbered advances 99 to 91, while 63 stocks were unchanged. The Indonesian rupiah was trading at 9,095/9,100 per US dollar, off an intraday low of 9,145, against 9,058/9,063 late Tuesday. A foreign exchange dealer with a local bank said the rupiah recouped some of its earlier losses as traders bought the local unit to cover short positions in late trade.
"The fall in the index today was actually driven by a sell-off in some stocks that had made strong gains recently, including Telkom, Indosat and PGN. This was a healthy correction," Batavia Properindo analyst Santikno Suherman said.
Telkom fell 300 rupiah or 2.7 percent to 11,000 while Indosat lost 250 rupiah or 3.3 percent to 7,400. Gas distributor Perusahaan Gas Negara dropped 100 rupiah or 1.1 percent to 8,850.
Suherman said the market needs to consolidate for a while before the main index attempts to move up to the next levels. "I think the main index can test 2,400 points this year." Gains in select big caps such as nickel miner Inco and Bank Rakyat Indonesia (BRI) offset the fall on the main index. Inco rose 1,100 rupiah or 2.1 percent to 53,600 on a technical rebound.
Suherman said valuation-wise, Inco is still attractive and is supported by hopes of a significant improvement in its first-half financial results on back of higher nickel prices. BRI added 100 ruppiah or 1.6 percent to 6,350 after Merrill Lynch upgraded its rating on the stock to a buy from neutral.
Bakrie Sumatra Plantations rose 40 rupiah or 2.4 percent to 1,720 after it announced yesterday that it has subscribed for a 20 percent stake in a 100-million-dollar joint-venture company called Agri Resources BV. The joint venture has some 250 million US dollars of funds for use in acquiring maturing oil palm plantations, and Bakrie Sumatra will manage the acquired estates.
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