Indonesia Stocks Plunge Amid MSCI Downgrade Fears
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Indonesia’s benchmark stock index fell over five percent on Monday, reaching its lowest level in six years. The Jakarta Composite Index slid to a trough not seen since early October two years ago, sparking a bruising sell‑off in Indonesian equities.
MSCI, the index provider, proposed reclassifying Indonesia from an emerging market to stand‑alone status, raising the prospect of removal from major global equity benchmarks. Goldman Sachs warned that a full removal could trigger approximately five point six billion dollars in passive fund outflows, while an additional two point seven billion dollars could be at risk if FTSE Russell follows suit.
The MSCI Indonesia Index has fallen forty‑seven percent this year, with foreign investors withdrawing a net five point one billion dollars. Foreign ownership of Indonesian stocks has dropped from twenty‑seven percent in January to twenty‑five percent in October, and the value of foreign holdings
Timeline
- On October 15 2026 MSCI proposes downgrading Indonesia to stand‑alone status.
- On October 16 2026 Indonesia’s stocks plunge over five percent amid downgrade fears.