Indonesia stocks plunge after MSCI says market could be cut from indices
Indonesian stocks plunged on Monday, October 19, sliding to a six-year low after MSCI warned the market could be expelled from its global indexes next year. The benchmark index fell over 5 percent as investors reacted to the potential downgrade. The Wall Street Journal reports this as the worst single day for Indonesian stocks since 1998. This market rout has raised concerns about market credibility and revived memories of the 1997 Asian financial crisis, though neighboring markets have not yet shown similar contagion.
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- ✓ Indonesian stocks reached a six-year low on October 19.
- ✓ MSCI warned that Indonesia could be cut from its global indexes next year.
- ✓ Indonesian stocks experienced their worst day since 1998.
- ✓ The benchmark index fell over 5 percent.
What changed
Indonesian stocks fell over 5 percent on October 19, reaching a six-year low following the MSCI warning.
Live updates
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Indonesian Stocks Hit Six-Year Low Following MSCI Index Warning
Indonesian stocks plunged on Monday, October 19, sliding to a six-year low after MSCI warned the market could be expelled from its global indexes next year. The benchmark index fell over 5 percent as investors reacted to the potential downgrade. The Wall Street Journal reports this as the worst single day for Indonesian stocks since 1998. This market rout has raised concerns about market credibility and revived memories of the 1997 Asian financial crisis, though neighboring markets have not yet shown similar contagion.
Why it matters
MSCI indices are critical for attracting global capital. An expulsion would likely trigger significant outflows as passive funds are forced to sell Indonesian assets. Jakarta has previously made a $5 billion bet on its own stock market to bolster stability.
What is confirmed
- Indonesian stocks reached a six-year low on October 19.
- MSCI warned that Indonesia could be cut from its global indexes next year.
- Indonesian stocks experienced their worst day since 1998.
- The benchmark index fell over 5 percent.
Still unconfirmed
- Indonesia is confronting a crisis of market credibility.
- The rout has reawakened the spectre of Asia's 1997 financial crisis.
What to watch next
- Jakarta's official response to allay MSCI concerns
- MSCI's final decision on Indonesia's index status for next year
confidence 90%Sources used for this update (12)
- finance.yahoo.com — Yahoo Finance - Stock Market Live, Quotes, Business & Finance News
- www.irishtimes.com — The Irish Times | Latest news and headlines - Irish news, world news ...
- Financial Times — Indonesia stocks plunge after MSCI says market could be cut from indices
- 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 — MSCI Ignites Indonesia Market Reckoning After Months of Warnings
- www.globalbankingandfinance.com — Asian Stocks Recover Amid CoreWeave Jitters; Indonesia Downgraded
- www.wsls.com — Stocks rebound after tech sell-off and Indonesia shares sink on market downgrade warning - WSLS News 10,WSLS 10 News
- www.ajupress.com — Indonesia's rout revives Asia's crisis ghosts, but risks diverge | Aju Press
- www.channelnewsasia.com — Indonesian stocks slide to six-year low as MSCI warning weighs - CNA
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