The index of the Indonesian Stock Exchange (BEI) fell 2.49 percent to 4,568.85 points to follow the regional trend. The index of 45 most liquid stocks sank 2.88 percent to 758.86 points.
Positive sentiment from Indonesian economic growth was not strong enough to offset negative sentiment brought about by global economic slowdown resulting in a fall in BEI index, Trust Securities` chief researcher Reza Priyambada said.
Reza said in the past five years Indonesian economy expanded 5.9 percent a year on the average.
The market players hope that the government take concrete steps to ward off the impact of global economic malaise, he said.
BEI recorded 123,889 transactions on Friday with 3.343 billion shares valued at Rp4.434 trillion changing hands.
Gainers were outnumbered by decliners by 46 to 215 with 94 remaining unchanged.
Regional markets such as Hang Seng recorded a 0.10 percent fall in index to 22,517.81 points with Nikkei-225 index down 0.75 percent to 13,650.11 points and that of Straits Times down 0.82 percent to 3,194.44 points.
Meanwhile, the country`s currency rupiah regained some of its lost value against the US dollar closing at 10,300 per dollar from 10,345 earlier on Friday.
The state of the nation address this morning by the President Susilo Bambang Yudhoyono predicting that the country`s economy would continue to grow this year gave a boost to the national currency, financial market observer Ruly Nova from Bank Himpunan Saudara said here on Friday.
In addition, the government still maintaining high economic growth target at 6.4 percent in 2014, also contribute to positive sentiment for rupiah in the market, Ruly said.
"The market players are quite optimistic that Indonesia would still chalk up a growth of more than 6 percent this year," he said.
However, the sentiment brought about by the president`s state of the nation address on the eve of the country`s Independence Day commemoration on Aug. 17 would not last long, he said.
In mid and long term external or global sentiments would prevail in the market, he said.
The market players would wait for the step to be taken by The Fed in September 2013, when it is expected to announce decision to cut, cancel or increase its financial stimulus depending on the US economic condition.
"The step to be taken by The Fed would have its impact on the global financial market," he said. (*)
Editor: Heru Purwanto
Copyright © ANTARA 2013
