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Jakarta. The benchmark Indonesian stock index joined a global rally and posted a solid gain on Friday, after US reports showed an unexpected increase in pending home sales and improved retail sales.

The Jakarta Composite Index rose 42.13 points, or 1.4 percent, to 3,164.28, closing at a record high. The index gained 1.9 percent for the week.

Volume was strong, with 4.8 billion shares worth Rp 4.1 trillion ($455.1 million) changing hands. Gainers outnumbered decliners 119 to 67.

Adaro Energy, the country’s second-biggest coal producer, rose 2.8 percent, ending a six-day slide. The miner is currently in talks with Bhakti Energi Persada to buy a stake in the smaller rival, director Andre J Mamuaya said, confirming a news report on Friday by Kontan.

Indosat, the country’s second-biggest telephone company, jumped 7.1 percent, its biggest gain since Jan. 15, after the stock was upgraded to “hold” from “sell” by Deutsche Bank analyst Raymond Kosasih. Indosat said on Friday that it expected revenue growth of as much as 10 percent for 2010, while revenue for its cellular unit would rise up to 17 percent. The company also expects to have as many as 42 million subscribers by year-end.

Tambang Batubara Bukit Asam, the state-owned coal producer, rose 2.3 percent. The miner said it might increase coal supplies to state power utility Perusahaan Listrik Negara to 15 million tons next year from six million tons this year, said Nur Pamudji, PLN’s director of primary energy.

The rupiah had its biggest weekly gain since July as Bank Indonesia increased lender’s primary-reserve requirements after inflation climbed to a 16-month high in August.

The central bank on Friday kept borrowing costs unchanged while ordering lenders to set aside 8 percent of their deposits as primary reserves, up from 5 percent previously. A government report this week showed inflation accelerated to 6.4 percent last month from 6.22 percent in July.

“Indonesia’s economic picture is still intact,” said Enrico Tanuwidjaja, an economist at OSK-DMG Group in Singapore.

“Going for a more prudent measure instead of a rate hike for liquidity management means investors will not immediately” sell the nation’s assets, he added.

Increasing the reserve requirements “was already expected by the market,” said Dino Nunuhitu, vice president at Indo Premier Securities in Jakarta. “There won’t be selling of Indonesian assets by offshore investors.”

The rupiah climbed 0.4 percent this week, the most since the five-day period ended July 30, to 9,003 per dollar as of the stock market’s close in Jakarta on Friday. The currency was little changed on the day.

The currency has gained 4.2 percent this year, the third-best performance among Asia’s 10 most-actively traded currencies excluding the yen.

Overseas funds have pumped $1.6 billion into Indonesian stocks this year and raised holdings of debt by 66 percent to Rp 178.8 trillion as the benchmark interest rate of 6.5 percent, which compares with a maximum of 0.5 percent in the United States, Britain and Japan, gives the currency a yield advantage.