Indonesia's share-market is likely to drift lower due to concerns over inflation but bargain hunters could seek value in gold and mining stocks, dealers said. "For now we are just worried about inflation," Syailendra Capital fund manager Mulia Santoso said.
"Inflation came in above market expectations so in the short term stocks will be under pressure." Annual inflation accelerated to a higher-than-expected 11.9 percent in July due to sharply higher costs for education, food, transport and housing, the Central Statistics Agency said Friday.
The high inflation data could trigger the central bank next week to hike its key interest rate, now at 8.75 percent. One dealer said mining and gold stocks were "relatively attractive" at current prices. But he said the banking sector could come under pressure after Malaysia's largest lender, Maybank, did not complete a planned purchase of a 56-percent stake in Bank Internasional Indonesia.
Indonesian shares slipped 2.4 percent at the close of trade Friday, led by foreign selling in blue chips. The Indonesian Stock Exchange ended the week at 2,248.75. The rupiah ended at 9,100 to the dollar compared to 9,125 a week earlier.
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