Indonesia Stocks Sink to 2020 Low on Middle East Strains, Capital Flight

Indonesian shares plunged 140 points, or 2.5%, to around 5,457 in Monday morning trading, marking the fourth straight session of losses and notching their lowest level since November 2020. The sell-off tracked declines across regional peers after reports of an Iranian missile strike on Israel reignited fears over the fragile ceasefire between Washington and Tehran. Domestically, heavy capital outflows deepened as the market has now plunged more than 30% this year. Meanwhile, the rupiah repeatedly slid to record lows amid investor unease over President Prabowo’s expansive spending agenda and surging fuel subsidies tied to the Middle East war. Weekend assurances from the central bank chief and finance minister to raise yields on local assets failed to stem the rout. Losses were broad-based, led by transport, energy, industrials, and cyclicals. Major laggards included MD Entertainment (-12.1%), Impack Pratama Industries (-10.5%), Vale Indonesia (-9.8%), and Hartadinata Abadi (-8.0%).

Indonesia’s IDX Composite slumped 116 points, or 2.0%, to 5,724 in early Friday trade, extending losses for a third session and hovering near its weakest level since May 2021. Sentiment was hit by softer U.S. futures after Wall Street’s mixed close, with the Dow at a record high but the Nasdaq lagging as traders rotated out of tech stocks. Domestic pressures compounded the slide. Foreign investors have booked net sales of over IDR 67 trillion this year, underscoring persistent outflows. Concerns also mounted over speculation that MSCI could downgrade Indonesia to Frontier Market status ahead of its June 19 review. The benchmark is on track for a seventh weekly fall, down about 6% this week and 33% ytd, making it the worst performer among more than 90 major global indices. Selling was broad-based, led by financials, transport, industrials, and infrastructure. Perusahaan Gas Negara sank 9.4%, followed by Pantai Indah Kapuk Dua (-8.5%), Adaro Andalan (-7.5%), and Sentul City (-6.3%).

Indonesian shares tumbled 283 points, or 4.8%, to 5,653 in Thursday morning trade, extending steep losses from the prior session and hitting their weakest since May 2021. The sell-off underscored mounting concerns: elevated oil prices stoking fiscal and external balance risks, fears of heavier state intervention in commodities, and jitters over a possible adverse MSCI reclassification rattling global funds. Markets have already shed around 34% this year, the worst performer among over 90 global equity indices, according to Bloomberg News. Meanwhile, April trade data showed the surplus faded as surging oil import costs outpaced exports. May inflation accelerated to 3.08%, above the central bank’s target midpoint. U.S. futures were mostly lower as renewed U.S.–Iran tensions kept inflation worries alive. All sectors fell, led by industrials, property, financials, and healthcare. Major losers included Barito Pacific (-13.9%), Darma Henwa (-10.2%), Indosat (-8.4%), and Kalbe Farma (-6.8%).