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Jakarta stocks bounce back with Wall Street

JAKARTA: Jakarta stocks on Thursday recovered some of their previous day's losses, lifted by a rebound on Wall Street overnight and hopes of foreign funds returning.

The composite index ended up 10.43 points, or 1.5 percent, at 688.52. Trading was heavy, with turnover estimated at 1.2 trillion rupiah.

The index fell more than 22 points on Wednesday.

Technology-related stocks dominated trading on Thursday, boosted by hopes the sector would boom this year as Indonesia's economy lifts off after two years of chaos.

Metrodata Electronics gained 500 rupiah or almost 19 percent to 3,150 rupiah on plans to distribute a stock bonus, followed by a rights issue next month.

The company also plans to diversify into internet business.

In the past three weeks Metrodata has surged almost 300 percent.

Another technology, stock Astra Graphia, also gained sharply after striking a deal restructure debt and finalising a divestment plan.

There is also speculation the firm has formed a strategic alliance with the Oracle Corp.

Astra Graphia closed early at 9,600 rupiah, up 3,150 rupiah or 48.8 percent. Due to the extraordinary gains, its trading was suspended by the bourse.

In the past three days its share price has jumped more than 130 percent.

But fund managers said despite the positive sentiment on the technology sector, the reasons for the spectacular gains were basically speculative.

"I would recommend my clients stick with turnaround stocks as the economy recovers," said an equity fund manager at a foreign brokerage.

She said retail stocks, the heavy equipment sector and the cigarette sector remained her top picks this year.

Hopes of returning overseas funds and economic recovery would be the main factors driving the market up this year, dealers said. They expect the index to reach 850 points before year-end, eclipsing its all time high of 742.964 in July 1997.-Reuters