Indonesian share prices closed 0.78 percent higher on Monday led by telecom and banking stocks as an unexpected easing in December inflation led to hopes for lower interest rates, dealers said.
The Jakarta Stock Exchange composite index rose 9.074 points to 1,171.709 on volume of 320.16 million shares worth 273.58 billion rupiah (27.80 million dollars). Gains led declines by a narrow 46 to 45, with 63 stocks unchanged.
The rupiah was at 9,820/9,830 to the dollar compared to Thursday's 9,835/9,840. The market was closed Friday.
December's Consumer Price Index (CPI) fell 0.04 percent from a month earlier led by lower food prices, official figures showed. Analysts had expected the CPI to rise 0.52-0.97 pct from November.
Dealers said trading was quiet as most investors were still away on holiday. "People are anticipating the January effect, which normally occurs in the second or third week of the month," Niaga Aset Management analyst Suhendar Asoka said, referring to expected seasonal gains in the market.
He said news of easing inflation was a positive factor.
Meanwhile, Bank Mandiri was supported by the central bank's plan to ease its classification rules for non-performing loans (NPLs), he added.
Bank Indonesia said last month that it may revise the rules as more loans have become non-performing due to the rise in interest rates. Indosat rose on reports the government plans to buy back a 40.77 percent stake in the company from Singapore Technology Telemedia (STT), Asoka said. Among major stocks, Telkom added 200 rupiah to finish at 6,100, supported by news that it will receive 478 billion rupiah from the government to compensate the loss of its monopoly rights over national phone services. Indosat rose 200 rupiah to 5,750.
Bank Mandiri added 30 rupiah to 1,670 and its peer Bank Negara Indonesia gained 20 rupiah to 1,300. Bank Niaga rose by 10 rupiah to 415. Bank Raykat Indonesia fell 25 rupiah to 3,000 and Bank Central Asia was flat at 3,400.