13/10/2011 (Jakarta Globe) - Local stocks rallied for a third successive day on Wednesday, reaching their highest close in three weeks.

The Jakarta Composite Index climbed 104.18 points, or 2.9 percent, to close at 3,635.93, its highest since ending trading on Sept. 21 at 3,697.49.

More than 8.56 billion shares worth Rp 5.97 trillion ($668.9 million) changed hands as gainers beat decliners 199 to 40.

Foreign investors on the Indonesia Stock Exchange (IDX) were net buyers of Rp 581 billion in shares, following on from a Rp 591 billion net buy on Tuesday.

“Bullish sentiment in the Indonesian market was triggered by positive sentiment from euro zone markets as solutions are starting to emerge,” said Janson Nasrial, an analyst at AmCapital Indonesia.

He said policy makers in Europe were on the right path by saving the banking sector first.

Euro zone authorities have revealed plans to recapitalize the region’s banks. In addition, a rescue fund for Greece is expected to be approved soon despite some resistance from Slovakia, the only one of the bloc’s 17 countries that has not ratified the plan.

The mining sector led the gains on the IDX, rising 4.5 percent. Bumi Resources, Indonesia’s largest coal producer, climbed 8.6 percent to Rp 2,150. Tambang Batu Bara Bukit Asam, a state-controlled coal miner, gained 7.3 percent to Rp 16,200.

“Coal mining valuations were only about 10 times price-to-equity ratio, which is one of the lowest among all sectors. Meanwhile, the commodity is always needed for energy,” Janson said.

The agribusiness sector rose 4.1 percent. Astra Agro Lestari, the country’s largest listed palm oil producer, climbed 6.5 percent to Rp 18,100. BW Plantation, a mid-sized plantation company, gained 4.1 percent to Rp 1,020. Palm oil futures rose 2.3 percent in Malaysia on Wednesday.

Consumer goods stocks gained 3.9 percent. Unilever Indonesia climbed 2.9 percent to Rp 16,000, while cigarette maker Gudang Garam was up 8.9 percent to Rp 61,000.

The rupiah weakened slightly to 8,945 to the dollar at the close of trading on Wednesday.