INDONESIAN stocks and the currency fell on Friday after explosions at two Jakarta hotels killed six people, denting the optimism built after last week's election.
Indonesian stocks opened 2 per cent lower on Friday after explosions at two international Jakarta hotels, the Ritz-Carlton and the Marriott.
Stocks later reduced their losses to less than 1 per cent.
Yields on one-year government bonds rose to 7.03 per cent on Friday from 6.90 per cent on Thursday.
There have not been any major bomb blasts in Indonesia for several years while this month's presidential elections passed off peacefully, underscoring the progress made by the world's most populous Muslim nation since the chaos and violence that surrounded the downfall of ex-autocrat Suharto in the late 1990s.
Six people were killed in nearly simultaneous explosions at the two hotels located in central Jakarta, Indonesian police said.
The rupiah fell 0.7 per cent to 10,200 per dollar, prompting state-owned banks to sell dollars to support the unit, traders said.
'There was a bit of panic in the market this morning after the explosions and investors tried to cover their short dollar positions,' said a trader in Jakarta.
'The market was quite short on the dollar yesterday because the rupiah was stronger,' the trader added.
The rupiah remains the best performing currency in Asia with a gain of about 8 per cent against the dollar so far this year.
The market has been positioning for further gains in the high-yielding currency after President Susilo Bambang Yudhoyono's re-election last week fanned optimism about economic growth and reform. --REUTERS
