The Jakarta Composite Index, fell 23.73 points, or 0.8 percent, to 2,968.72 as of 10:02 a.m. local time, on course for its steepest drop since July 1.

Coal producers Adaro Energy, Indonesia’s second-biggest coal producer, fell 1.7 percent to Rp 1,990 and Indo Tambangraya Megah, the unit of Thailand’s largest coal miner Banpu Pcl, declined 1.2 percent to Rp 37,750. Power-station coal prices at Australia’s Newcastle port, a benchmark for Asia, slid 0.7 percent to $96.34 a metric ton in the week ended July 16, declining for the second straight week.

Bank Internasional Indonesia, the biggest overseas unit of Malaysia’s largest bank, fell 1.7 percent to Rp 285. The company may sell Rp 1 trillion ($110 million) of bonds in the second half of this year, Investor Daily Indonesia reported, citing Director Stephen Liestyo.

Summarecon Agung, a property developer, rose 1.2 percent to Rp 850. Summarecon expects profit to rise by 30 percent to about Rp 100 billion in the first half of this year, Kontan reported, citing President Director Johanes Mardjuki.

Indonesia’s rupiah dropped the most in almost three weeks on concern overseas investors will pull funds from the nation’s shares as equities fell.

Asian currencies and stocks declined after data on July 16 showed U.S. consumer confidence was at the lowest level in a year this month and Bank of America Corp. and Citigroup Inc. reported sales that missed economists’ estimates. The MSCI Asia- Pacific index excluding Japan slipped 0.9 percent, a third day of losses

“The rupiah is weaker as we had a correction in the global stock markets and people are worried that the local stock market will also be affected,” said Aris Setiawan, a currency trader at PT Bank Chinatrust Indonesia in Jakarta.

The rupiah lost 0.3 percent to 9,072 per dollar as of 9:59 a.m. in Jakarta after earlier reaching a one-week low of 9,083, according to data compiled by Bloomberg. The currency has gained 3.5 percent this year, a performance second only to Malaysia’s ringgit.

The nation’s interest-rate advantage and economic growth should help to limit losses in the currency, Setiawan said.

Indonesia’s rupiah-denominated bonds have returned 14 percent this year, the biggest gain among 10 Asian local- currency debt indexes compiled by HSBC Holdings Plc. Global funds owned a record 166 trillion rupiah ($18 billion) of government notes as of July 8, 54 percent more than at the start of the year.

Foreign investors have also bought $1.1 billion more Indonesian stocks than they sold this year, helping push up the Jakarta Composite Index 18 percent, Asia’s second-biggest gainer.

Indonesia’s interest rate of 6.5 percent compares with a maximum 1 percent in the U.S., Europe and Japan. Finance Minister Agus Martowardojo predicts gross domestic product will increase 5.9 percent this year.

“The rupiah’s fundamentals are still okay and its interest rate is still very attractive,” Setiawan said, predicting a range of 9,040 to 9,080 per dollar for the currency today. Bank Indonesia may limit the currency’s losses to 9,080, he added.

The Thomson Reuters/University of Michigan preliminary index of US consumer sentiment decreased to 66.5, the lowest level since August and less than the most pessimistic forecast of economists surveyed by Bloomberg News.

Shayne Heffernan www.livetadingnews.com

Posted by Shayne Heffernan on Jul 19th, 2010and filed underASEAN News, Asia, Latest News, Shayne Heffernan.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site