Shoeb Kagda, Jakarta – As the death toll from Sunday's bloody clashes between rival ethnic groups rose to 13 yesterday, President B J Habibie expressed concern about the deteriorating social order in the capital city and promised to finance the reconstruction of churches damaged during the rioting.

Financial markets, however, shrugged off the rising social tension to continue their upward climb. The benchmark Jakarta Composite Index rose 5.3 per cent to close at 424.99 points while the rupiah remained steady at the 7,500 per dollar level.

"The market is focusing on the macroeconomic picture and not too many people are paying attention to the disturbance on the streets," said Brian Thomas of Paribas Asia Equity. "But if the situation does escalate into something more substantial, it will start to affect the markets."

Rescuers yesterday pulled out the charred bodies – seven victims from a gambling hall torched by anti-Christian rioters, with one body identified as belonging to an ethnic Chinese man.

During Sunday's rioting, seven churches were set ablaze and six others were damaged. The mob also damaged three banks, one hotel and two schools and set fire or damaged 14 cars and one motorcycle, reported the Media Indonesia daily.

Jakarta remained tense with most shops in the city's Chinatown area remaining closed for the day despite heavy troop presence. Most of the city's Christian schools also issued radio announcements that they would remain closed for between one day and a week.

Rumours of more unrest continued to circulate yesterday as the city's 11 million citizens braced themselves for the worst. The rioting on Sunday followed last week's deadly clashes between security forces and protesting students, which left seven students dead from gun shot wounds.

President Habibie blamed provocateurs for the riots and called on Indonesians not to be taken in by false rumours. "The incident was the result of provocations by individuals who do not want political stability in Indonesia," the president was quoted as saying by State Secretary Akbar Tanjung.

"The president is very concerned over the incident and is calling for restraint on the entire Indonesian nation and for them not to fall for rumours, especially those pitting religious and ethnic groups against one another," said Mr Tanjung at the Merdeka Palace after meeting with Dr Habibie.

Muslim and Christian leaders condemned the burning of 13 Christian churches and schools, with one Presbyterian priest noting that the attacks on the churches were not spontaneous.

Two leading opposition leaders – Abdurrahman Wahid, chairman of the National Awakening Party (PKB) and Megawati Sukarnoputri, head of the Indonesia Democratic Party (PDI) – issued a joint call urging people not to fall prey to incitement.

"It is an absolute prerequisite that all citizens realise how large our national interest is at stake and there are extremist groups which do not have other interest than causing unrest," the joint statement said.

Political analysts fear that the fresh outbreak of social and ethnic tension threatens to tear the nation apart amidst its worst economic crisis in three decades. As urban poverty and inflation-induced famine continue to rise, desperate, hungry people will not act in a rational way, said political economist Sjahrir.

"Widening urban poverty will lead to chaos as in Jakarta itself, an estimated one million people do not have enough purchasing power to even consume 500 calories per capita," he told BT.

"We have now entered into a primal level of politics and you will have social explosions everywhere." Mr Sjahrir, who heads the Institute for Economic and Financial Research (ECFIN), added that ethnic and religious tensions, which started with a spate of mysterious killings in East Java about two months ago, could unleash a wave of terror which would be impossible for the authorities to control if allowed to continue.