Indonesian Shares Suffer Biggest Daily Drop Since 1998

Indonesian stocks plunged 660 points, or 10.8%, to around 5,200 on Friday, a six-year low and marking their steepest one-day decline since January 1998. MSCI has warned that it could downgrade Indonesia to standalone market status, citing concerns over market transparency, concentrated share ownership and insider trading and deepening concerns about investability in south-east Asia’s largest economy. The potential move threatens significant capital outflows, with Goldman Sachs estimating up to $13 billion in withdrawals. MSCI’s final decision will be due by June 30, 2027. Indonesia’s financial regulator said it was “carefully reviewing and paying serious attention to MSCI’s assessment." All major sectors recorded steep losses, led by basic materials, energy, financials, and infrastructure. The four largest banks tumbled between 8.5% and 14%, while Telkom Indonesia (-11.7%), Astra Intl. (-9.6%) and Jasa Marga (-14.8%) also posted deep losses.

JCI decreased to 5287.00 Index Points, the lowest since November 2020. Over the past 4 weeks, Jakarta Stock Exchange Composite Index lost 8.9%, and in the last 12 months, it decreased 27.83%.

Indonesian equities opened sharply lower Friday, tumbling 470 points or 8% to 5,393 after MSCI proposed downgrading the country to standalone market status, citing persistent governance concerns and suspected coordinated trading. A final decision is due June 30, 2027. Despite reforms, MSCI flagged weak enforcement and market dysfunction. Goldman Sachs earlier estimated a downgrade could trigger up to $13 billion in outflows, with active managers likely to cut exposure to avoid benchmarking mismatches. Still, Indonesia's Financial Services Authority pledged continued improvements, stressing domestic markets remain attractive. However, massive liquidations risk severely weakening the rupiah and draining liquidity, compounding FX pressure as equities have already slumped more than 30% this year, making Indonesia the world’s worst-performing index in 2026. Selling was broad-based, led by financials, transport, non-cyclicals, healthcare, and property.