Indonesian shares closed 0.9 percent lower on Tuesday as most stocks reversed course and gave up early gains ahead of the release of inflation figures for May, dealers said. The Jakarta composite index closed down 22.73 points or 0.9 percent at 2,397.0, off an intraday high of 2,447.04. Volume was 4.76 billion shares worth 5.32 trillion rupiah (569.24 million dollars).
The rupiah was trading at 9,335/9,340 to the dollar, against 9,347/9,352 late Monday. Decliners led advancers 110 to 94, while 63 stocks were unchanged."I guess people were reluctant to hold on to their positions ahead of the inflation data due out next week," said Krishna Dwi Setiawan, an analyst at Valbury Asia Securities.
Figures are likely to show a big jump in May inflation because most prices of goods have gone up even before the government hiked the prices of subsidised fuel by an average 28.7 percent last Saturday, he said.
Inflation in May will likely trigger an aggressive interest rate hike by Bank Indonesia in June, probably by 50 basis points, he said. The key interest rate, called the BI rate, currently stands at 8.25 percent. Coal producer Bumi Resources, which led the main index rally at midday, came under pressure in late trade. The stock tumbled 4.0 percent to close at 7,200 rupiah, off an intraday high of 7,700 rupiah. Interest-rate sensitive stocks such as banks were also among the decliners. Bank Mandiri lost 0.9 percent to 2,750 rupiah, Bank Rakyat Indonesia eased 0.8 percent to 5,950 rupiah, and Bank Central Asia slid 2.6 percent to 2,800 rupiah.
Bucking the trend, crude palm oil (CPO) producer Astra Agro firmed 0.8 percent to 26,050 rupiah, but was off an intraday high of 26,800 rupiah. Other CPO producers were higher due to stronger CPO prices. Lonsum added 1.0 percent to 10,500 rupiah and Bakrie Sumatra Plantation surged 7.3 percent to 1,910 rupiah, also driven by higher rubber prices.