Indonesian shares end lower led by commodity stocks on oil price retreat -UPDATE

07.18.08, 7:10 AM ET

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JAKARTA (Thomson Financial) - Indonesian shares closed lower on Friday, with the key index retreating to near 11-month lows driven by a sell-off in commodities such as palm oil producers and coal miners, amid expectations that the pullback in oil prices may also push down prices of other commodities.

Light, sweet crude fell $5.31 to settle at $129.29 a barrel on Thursday.

In Asian trading Friday, New York's main oil contract, light sweet crude for August delivery, rose 51 cents to $129.80 a barrel.

Leading the decliners were palm oil producer Astra Agro, giant coal miner Bumi Resources and nickel and gold miner Antam.

But the market's fall was limited by gains in banks and select big caps such as conglomerate Astra International and Telkom, which benefited from a technical rebound following recent falls.

The composite index was down 26.58 points or 1.2 percent at 2,141.14. For the week, the key index dropped 129.71 points or 5.6 percent.

The LQ-45 index was down 4.96 percent at 441.56.

Decliners led gainers 120 to 70, with 69 stocks unchanged.

Volume was 2.84 billion shares valued at 4.43 trillion rupiah.

The Indonesian rupiah was trading at 9,143/9,153 to the U.S. dollar, against 9,142/9,145 late Thursday.

'The fall in the oil price appears to have encouraged investors to unload their commodity stocks as they are worried this might be followed by other commodity prices,' NISP Sekuritas analyst Triwira Tjandra said.

He said CPO and coal are substitute products for oil, which is why the retreat in the oil price also dampened sentiment in these stocks.

'But we saw some buying interest in select big caps and banks as market players may have seen good value in these stocks following their recent falls,' Tjandra said.

He said banking stocks may have also attracted interest on expectations that they will report solid earnings for the first half of this year.

Coal miners were mostly lower, with Bumi Resources falling 7.1 percent to 5,900 rupiah, Bukit Asam losing 9.9 percent to 12,300 rupiah and Indo Tambangraya giving up 7.1 percent to 29,400 rupiah.

Astra Agro fell 10.9 percent to 21,300 rupiah, Bakrie Sumatra lost 6.7 percent to 1,260 rupiah, London Sumatra declined 8.8 percent to 7,300 rupiah and Sampoerna Agro gave up 7.7 percent to 2,700 rupiah.

Tin miner Timah lost 9.3 percent to 30,600 rupiah, nickel and gold miner Antam dropped 11.7 percent to 2,450 rupiah, Adaro Energy fell 3.5 percent to 1,640 rupiah and Indika Energy lost 4.3 percent to 2,800 rupiah.

Among the gainers, index heavyweight Telkom advanced 0.8 percent to 6,750 rupiah, Bank Mandiri rose 1.9 percent to 2,700 rupiah, Bank Rakyat Indonesia added 6.5 percent to 5,700 rupiah and gas distributor Perusahaan Gas Negara edged up 2.2 percent to 11,500 rupiah.

Bank Danamon was up 4.8 percent at 4,950 rupiah after announcing late on Thursday its first-half to June net profit rose 14 percent year-on-year to 1.16 trillion rupiah.

roffie.kurniawan@thomsonreuters.com

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