MSCI Review Sparks Selloff in Indonesian Stocks

Indonesian shares plunged 96 points, or 1.4%, to 6,760 in Wednesday morning trade, extending losses for a fourth session and notching their lowest since mid-2025. Sentiment soured after Morgan Stanley Capital International (MSCI) removed six local stocks from its Global Standard Index. The adjustment could reduce Indonesia’s weight in MSCI indexes by 16bps from 0.72% to 0.56%, potentially triggering IDR 29.5 trillion in capital outflows, according to local media. Meanwhile, U.S. equity futures were mixed after Wall Street closed mostly lower overnight, pressured by hotter-than-expected April inflation, higher oil prices, and persistent Middle East tensions. Most sectors in IDX Composite retreated, led by healthcare, cyclicals, and energy, though transport and industrials posted gains that helped cap losses. Major decliners included Amman Mineral Intl. (-9.1%), Petrindo Jaya Kreasi (-9.0%), Sumer Alfaria Trijaya (-4.2%), and Alamtri Resources (-2.3%).

JCI decreased to 6744.00 Index Points, the lowest since April 2025. Over the past 4 weeks, Jakarta Stock Exchange Composite Index lost 12.03%, and in the last 12 months, it decreased 3.25%.

Indonesia’s benchmark index dropped 70 points, or 1%, to 6,837 in early Tuesday trade, its third straight loss and weakest level since mid-2025. Risk appetite soured as weaker U.S. equity futures deepened global jitters after President Trump warned the Iran ceasefire was “on life support,” rejecting Tehran’s counterproposal and stoking fears of prolonged conflict. At home, rupiah worries added pressure, with local media saying President Prabowo had reprimanded Bank Indonesia Governor Perry Warjiyo as the currency hovered near a record low around IDR 17,400 per dollar. Sentiment was also hit by Indonesia’s manufacturing drop in April, the first in nine months, due to softer post-festive demand and rising production strains from geopolitical and supply shocks. Nearly all sectors fell, led by industrials, infrastructure, and healthcare. Major decliners included Impack Pratama Industri (-8.0%), Sumber Alfaria Trijaya (-6.1%), Raharja Energi Cepu (-4.3%), and Sumber Global Energy (-3.4%).