JAKARTA (Thomson Financial) - Indonesian shares closed sharply lower on Thursday, with the key index touching a 10-month low as market players sold off palm oil stocks and miners after a retreat in commodity prices.
The government's plan to raise the royalties paid to the state by mining companies also hit sentiment in the sector, analysts said.
The key composite index rose as much as 1.5 percent in morning trade, following a 2.5-percent jump in the Dow industrials overnight, as oil prices retreated sharply for a second day to below $135 a barrel.
The composite index was down 50.41 points or 2.3 percent at 2,167.71 points, after having risen to 2,251.99.
The LQ-45 index was down 10.88 points at 446.53.
Decliners led gainers 173 to 46, with 61 stocks unchanged.
Volume was 3.42 billion shares valued at 5.09 trillion rupiah.
The Indonesian rupiah was trading at 9,142/9,145 to the U.S. dollar, compared to 9,145/9,150 late Wednesday.
BNI Securities analyst Muhammad Alfatih said the sell-off in commodity stocks was mainly triggered by a pullback in the prices of some commodities such as crude palm oil (CPO) and nickel.
'The government's plan to limit exports of coal and raise the royalty paid by mining companies as well as the export tax on crude palm oil seem to have harmed market sentiment,' Alfatih said.
'Investors, including foreign investors, do not like these kinds of plans so they decided to square off their positions,' he said.
Indonesia's largest coal miner Bumi Resources dropped 6.6 percent to 6,350 rupiah, its peer Bukit Asam gave up 6.8 percent to 13,650 rupiah, Adaro Energy fell 1.7 percent to 1,700 rupiah and tin miner Timah lost 3.0 percent to 33,750 rupiah.
Crude palm oil producers were mostly lower, with Astra Agro losing 5.5 percent to 23,900 rupiah, Bakrie Sumatra falling 9.4 percent to 1,350 rupiah and London Sumatra dropping 8.1 percent to 8,000 rupiah.
Nickel miner Inco fell 6.1 percent to 4,225 rupiah and nickel and gold producer Antam declined 5.1 percent to 2,775 rupiah.
Index heavyweight Telkom was down 3.6 percent at 6,700 rupiah.
Among gainers, conglomerate Astra International gained 2.8 percent to 19,900 rupiah, Indonesia's largest bank by assets Bank Mandiri rose 1 percent to 2,650 rupiah and Bank Rakyat Indonesia advanced 1.9 percent to 5,350 rupiah.
roffie.kurniawan@thomsonreuters.com
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