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Jakarta shares close lower on regional falls

JAKARTA: Jakarta shares headed lower along with other regional markets on Monday as players sold off shares, led by blue chips which experienced significant gains last week.

The Jakarta composite index closed down 8.61 points, or 1.4 percent, at 587.58 points. Leading the market lower were natural resources stocks like pulp and paper firm PT Indah Kiat and fishery company PT Daya Guna Samudera after their gains last week.

Shares in Indah Kiat were down 100 rupiah at 2,350 on 70 million shares traded, while Daya Guna closed down 200 rupiah at 1,575 on 20 million shares.

The index was expected to climb higher after it broke the resistance level of 593 points last on Friday, but on Monday's sharp regional fall weighed the index down, one dealer said.

"The market will tend to be mixed this week. There will be some declines but they won't be significant," an analyst with Trimegah Securities said.

Dealers said the weakening rupiah also dampened sentiment.

Indonesia's rupiah had declined to 7,415/7,445 to the dollar from 7,388/7,398 in early trade.

But dealers said the rupiah could recover after March, after the government completes the sale of its 40 percent stake in auto giant PT Astra International, due to be finished by the end of the month.

Shares in Astra were up 50 rupiah at 3,700 on 9.1 million shares traded.

Bank Indonesia said last week it saw no need to increase domestic interest rates despite the global trend of raising interest rates due to further possible US interest rates hikes. But the bank said it would remain watchful.

The US Federal Reserve's rate-setting committee next meets on March 21 to decide whether to raise borrowing costs. -Reuters