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ndonesian shares extended their losses on Friday as the withdrawal of foreign funds, due to concerns that the US central bank will reduce its bond-buying program, continued.

Share prices declined across the board, further pushing down the exchange'€™s main price benchmark, the Jakarta Composite Index (JCI), which dropped 2.5 percent to below the 4,500-mark for the first time since Feb. 8.

It ended the day at 4,515.37. The index has lost about 15 percent since its peak of 5,214 on May 20.

US Federal Reserve Governor Ben Bernanke announced on June 19 that the Fed would begin winding down its bond purchases over the next few months.

The purchases will end in the middle of next year if the US economic recovery continues. The announcement triggered massive sell-offs in global financial markets in the past several days.

Except for Japan and India, all other Asian indexes declined on Friday. Singapore'€™s FTSE ST declined 0.3 percent to 3,124.45 and Malaysia'€™s FTSE BM dropped 0.4 percent to 1,755.85. The Philippines'€™ PSE Index slumped 2.3 percent to 6,182.17.

 AmCapital Indonesia analyst Akhmad Nurcahyadi said that apart from the global sentiment, Indonesia'€™s stock market was also jittery about the delay in the planned increase in subsidized fuel prices and the impact of the increase on inflation.

 '€œWe have so much unfinished homework that could affect the market. For example, the fuel price increase plan, we do not know when exactly the new fuel price will be introduced,'€ he said.

With the lingering uncertainties, the selling spree conducted by foreign investors continued on the local stock market. Data from the Indonesian Stock Exchange (IDX) shows that foreign net sales reached a total of Rp 2.26 trillion (US$228.26 million) on Friday, higher than the Rp 1.28 trillion recorded a day before.

Friday'€™s sell-off led to a significant reduction in the year-to-date figure for foreign net buying to Rp 21.3 billion. In January, the figure was Rp 5.69 trillion.

However, Akhmad said that overall, the country'€™s stock market still fared well compared to others in the Asia-Pacific region.

Reliance Securities research head Wilson Sofan voiced a similar opinion, saying the Indonesian economy was still promising despite the current downturn. '€œBank Indonesia [BI] recently increased its benchmark interest rate and the government is cutting fuel subsidies. These will all be good for the market,'€ he said.

Both Akhmad and Wilson predicted that the JCI would rebound slightly in the middle of next week.

The sell-off of Indonesia'€™s stocks also put pressure on the rupiah.

 On Thursday, the rupiah fell 0.6 percent to 9,935 per US dollar in the evening, after touching 10,000 earlier in the afternoon, Bloomberg data shows. Volatility was at its peak, with one-month implied volatility for the rupiah climbing 86 basis points to 16.19 percent, the highest level in a year.

BI has said that it will intervene '€œcarefully'€ in the market to support the rupiah, a statement that signals that the central bank might back off from pouring in too many dollars to avoid a further decline in its foreign exchange (forex) reserves.

'€œWe will remain in the market, but we will do it [intervention] carefully, as pressure has been high these days,'€ BI'€™s executive director for monetary research, Dody Budi Waluyo, told reporters after Friday prayers in his Jakarta office.

BI'€™s forex reserves, used by the central bank to supply dollars to the market against imports and foreign debt payments, stood at $105.1 billion by the end of May and has fallen by a cumulative $7.7 billion since the beginning of this year.

'€œI think '€˜carefully'€™ intervening means smoothing the movements in the rupiah and not intervening aggressively to hold certain levels,'€ Sean Yokota, a Singapore-based analyst with Swedish bank SEB, said on Friday.

In the non-deliverable forwards (NDF) market in Singapore, the rupiah had big negative carry risk so it was difficult for investors to hold the currency for a long time, Yokota said. '€œI think it [the rupiah] will go over 10,000. My three month forecast for the rupiah to US dollar is 10,150,'€ he added.