JCI, Rupiah Strengthen as Worries Over Greece Ease

The Jakarta Composite Index and the rupiah both gained on Tuesday after European finance ministers signaled the debt crisis in Greece would not trigger excessive tightening measures across the continent.

The JCI rose 14.72 points, or 0.5 percent, to close at 2,834.18. Some 4.45 billion shares worth Rp 4.27 trillion ($469.7 million) changed hands. Gainers led decliners 119 to 71.

Leading the JCI’s gain were banking stocks, which had been considered undervalued after recent declines.

“The JCI’s gain was also supported by the rebound in commodity stocks,” said Purwoko Sartono, an analyst at PT Panin Sekuritas. However, Purwoko said the JCI would continue consolidating and in the short-term would continue to be affected by Europe’s debt worries.

The rupiah halted a two-day slide on speculation the central bank was intervening to counter exchange-rate swings that may hurt the economy. It traded at Rp 9,109 against the dollar on Tuesday at stock market close, compared to Rp 9,142 on Monday.

“Bank Indonesia is guarding the rupiah so that it isn’t volatile,” said Muhammad Fauzi Halim, a foreign-exchange trader at PT Bank Resona Perdania. “If the rupiah appreciates to 9,100, it won’t satisfy the exporters.”

“There’s some breathing space for Asian currencies for now as the bad news in Europe diminishes,” said Mohd Zaki Talib, a foreign-exchange trader at RHB Bank in Kuala Lumpur. “The market is not fully convinced that the worst for the euro is over.”

Among the gainers, PT Bank Mandiri rose 2.8 percent, PT Bank Central Asia gained 1.9 percent and PT Bank Danamon climbed 2.9 percent.

Coal miner PT Bumi Resources added 2.1 percent after it was reported that its subsidiary, PT Bumi Resources Mineral, would sell as much as 30 percent of its equity in an initial public offering in September to raise $600 million.

PT Indika Energy, Indonesia’s third-largest coal producer, jumped 5.7 percent to Rp 2,775.