Indonesia Stocks Log Worst Day Since 1998 on MSCI Downgrade Warning
Indonesian equities suffered their worst day since 1998, plunging sharply following a warning from MSCI regarding a potential downgrade and exclusion from major global indexes. The steep selloff triggered a market crash with drops reaching double digits, as international sentiment soured over the looming removal. The dramatic plunge serves as a severe wake-up call for Indonesian markets, compounding regional pressures from hot US inflation and higher-for-longer Federal Reserve interest rates. Investors are now assessing the massive exposure and implications of the potential index expulsion.
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- ✓ Indonesian stocks logged their worst day since 1998 following an MSCI downgrade warning.
- ✓ MSCI prepared to expel Indonesia from global indexes.
What changed
MSCI proposed a major downgrade and potential expulsion of Indonesia from its global indexes, sparking a historic selloff.
Live updates
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Indonesia Stocks Log Worst Day Since 1998 on MSCI Warning
Indonesian equities suffered their worst day since 1998, plunging sharply following a warning from MSCI regarding a potential downgrade and exclusion from major global indexes. The steep selloff triggered a market crash with drops reaching double digits, as international sentiment soured over the looming removal. The dramatic plunge serves as a severe wake-up call for Indonesian markets, compounding regional pressures from hot US inflation and higher-for-longer Federal Reserve interest rates. Investors are now assessing the massive exposure and implications of the potential index expulsion.
Why it matters
The potential removal from MSCI global indexes threatens to trigger forced selling by passive institutional funds that track these benchmarks. This market stress coincides with broader Asian financial pressures driven by hotter-than-expected US inflation data and persistent Federal Reserve monetary policy. Indonesia previously made a multi-billion dollar bet to support its domestic stock market, but the current index threat has overpowered local defense efforts.
What is confirmed
- Indonesian stocks logged their worst day since 1998 following an MSCI downgrade warning.
- MSCI prepared to expel Indonesia from global indexes.
Still unconfirmed
- The Indonesian stock market crashed by 11.57% after the MSCI warning.
What to watch next
- Final decisions by MSCI regarding the index exclusion and downgrade status.
- Further domestic market interventions or defensive financial measures by Indonesian authorities.
confidence 90%Sources used for this update (11)
- help.naver.com — Futures Flat As Oil Rebounds After Trump's "Energy Ceasefire" Unravels, Memory Stocks Slide | ZeroHedge
- Reuters — Indonesia gets 'wake-up call' as MSCI prepares to expel it from global indexes
- The New York Times — Indonesian Stocks Plunge on Threat to Drop Market From Major Indexes
- WSJ — Indonesia Stocks Log Worst Day Since 1998 on MSCI Downgrade Warning
- Fortune — Indonesia's $5 billion bet on its own stock market
- Bloomberg.com — What Happens If Indonesia Is Removed From MSCI’s Global Indexes?
- asiatimes.com — Hot US inflation singes Asia as higher-for-longer Fed rates ...
- finance.yahoo.com — Indonesia stocks hit six-year low as MSCI warning deepens selloff
- iccan.in — Indonesia Stock Market Crash: 11.57% Fall After MSCI Warning » iccan.in: Latest News Updates
- www.marketscreener.com — Indonesia Stocks Slump to Lowest Level Since 2020 on MSCI Warning -- Update
- www.marketscreener.com — Indonesian markets tumble after MSCI's warning. Here's what's at stake.
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