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Jakarta stocks close higher, rebound continues

JAKARTA: Jakarta shares closed sharply higher on Monday as investors took heart from gains locally and on Wall Street on Friday to go on a buying spree.

Dealers said on Friday's local gains, while modest, had encouraged players after a two week slide in the market and Wall Street fed the positive momentum. The Jakarta composite index closed up 18.16 points, or 3.3 percent, to 566.71 points.But analysts did not expect on Monday's sharp rebound to be sustained, expecting renewed volatility if Wall Street and regional bourses weakened.

Some dealers said a visit by President Abdurrahman Wahid to his dumped minister and former armed forces chief General Wiranto may help reduce tension between the civilian government and the military.

A stabilising rupiah was also helping the stock market, an analyst with Securities said.

"Local players were dominating the transactions as they cannot resist buying after they saw foreign funds selling recently," a dealer with Pentasena Arthasentosa said.

He said blue chips had fallen an average 15 percent over the last two weeks.

Dealers said some news on certain individual companies had boosted their stocks, including cement firm Semen Gresik which rose 900 rupiah, or 11.1 percent, to 9,000.

News the government had agreed in principle to a proposal by Mexico's Cemex to increase its holding in the company to a majority lifted sentiment on Gresik.

Cigarette stocks Gudang Garam and HM Sampoerna, which shed more than 20 percent in the past two weeks, climbed further after leading on Friday's gains.

Sampoerna was up 200 rupiah at 12,500 and Gudang Garam 600 rupiah to 13,200.

The 3.37 percent rise in the Nasdaq index, fuelled by strong gains in semiconductor and computer stocks, also helped sentiment in some Indonesian technology shares, led by Internet-linked companies Multipolar and Metrodata.

Shares in Multipolar rose 125 rupiah to 1,075 and Metrodata 325 rupiah to 1,550.

Dealers said a knife attack on the chairman of Wahid's Nation Awakening Party, who is also deputy speaker of the country's top legislature, had no significant impact. -Reuters