The index of the Indonesian Stock Exchange (BEI) fell 111.11 points or 1.89 percent to 5,756.61. The index of 45 most liquid stocks dropped 2.27 percent to 904.33 points.
Stock market observer Aria Santoso said investors were prompted to sell their shares on rising US dollar.
"The appreciation of the US dollar over other strong currencies in the world sent negative sentiment to the domestic market that could affect the performance of listed companies," Aria said .
The sharp fall of the IHSG could prompt investors to buy and collect shares selectively, he said.
There were 435,603 transactions on Thursday with 11.12 billion shares valued at Rp8.36 trillion changing hand. There were 90 gainers, 305 decliners and 99 share remaining unchanged.
Meanwhile, the national currency rupiah closed at 15,150 per U.S. dollar weakening from the earlier level of 15,064 per dollar.
Analyst of Monex Investindo Futures, Putu Agus, said the US dollar appreciated over other currencies in the world on improve labor data and improved condition of the world`s largest economy.
"The US labor data improved, better than expected confirming the statement of the Fed on US economic strength prompting investors to acquire dollar denominated assets," Putu said.
Economist of Samuel Aset Manajemen Lana Soelistianingsih said oil price hike in the world market contributed to weakening rupiah.
For Indonesia, a former member of the Organization of Petroleum Exporting Countries (OPEC) an increase in oil price was negative as it is now a net importer of oil," he said.
Reporting by Zubi Mahrofi
Editing by Yoseph Hariyadi
Reporter: antara
Editor: Heru Purwanto
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