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Jakarta stocks gain ground on Dow, regional gains

JAKARTA: Jakarta stocks gained ground on Wednesday after two days of losses, triggered by Wall Street's rise overnight after the US Federal Reserve raised lending rates by 25 basis points as expected.

The composite index ended up 7.9 points or 1.4 percent at 586.9 points on an estimated 630 billion rupiah turnover.

Dealers said trading was volatile amid a lack of new development from the domestic side, and the nearest index resistance level was seen at 587, then 593, with support seen at around 570.The index went up more than five points in earlier trade but profit taking quickly erased almost all the gains later on. But late buying in several big cap stocks dragged the index up again to close almost eight points higher.

"The thin trading had made the index volatile today," said a market strategist at a state-owned brokerage.

Dealers said news that the government expected GDP growth of more than two percent during the 1999/2000 fiscal year had little impact.

"It's all been expected," said an economist at a local brokerage.

Auto giant Astra International extended the previous day's losses, down 25 rupiah to 3,725. Talk that the bidders for the Indonesian Bank Restructuring Agency's (IBRA) stake in Astra were bidding lower than the expected 4,000 rupiah dampened sentiment on the shares.

But has set the floor price for its stake at 3,750 rupiah. The agency will announce the winning bidder on Saturday.

Among the biggest gains were cigarette stocks Gudang Garam which rebounded 600 rupiah or four percent to 15,000 rupiah, and HM Sampoerna, which also rebounded 250 rupiah, or almost two percent to 13,200 rupiah.

Bank Indonesia's weekly auction of one month certificates on Wednesday resulted in a weighted average interest rate of 10.91 percent, slightly lower than 10.95 percent the previous week.

The bank had said it still saw no need to increase domestic interest rates despite a further rise in the US interest rates.-Reuters