Indonesian Stocks Plunge as MSCI Threatens to Drop Market from Indexes
Indonesian stocks plunged to a six-year low on Monday, October 19, following a warning from MSCI that the market could be expelled from its global indexes next year. The benchmark index fell over 5 percent as investor sentiment weakened. This potential exclusion threatens to cut Indonesia off from global capital, marking a rare move by the index provider. The downturn represents the worst single-day performance for the market since 1998, putting pressure on Jakarta to address MSCI concerns to prevent a formal downgrade.
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- ✓ Indonesian stocks fell to a six-year low on Monday, October 19.
- ✓ MSCI warned that the Indonesian market could be cut from its global indexes.
- ✓ The market experienced its worst day since 1998 following the MSCI downgrade warning.
- ✓ Jakarta's benchmark stocks fell over 5 percent.
What changed
Indonesian stocks recorded their worst day since 1998 and hit a six-year low on October 19.
Live updates
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Indonesian Stocks Hit Six-Year Low After MSCI Index Warning
Indonesian stocks plunged to a six-year low on Monday, October 19, following a warning from MSCI that the market could be expelled from its global indexes next year. The benchmark index fell over 5 percent as investor sentiment weakened. This potential exclusion threatens to cut Indonesia off from global capital, marking a rare move by the index provider. The downturn represents the worst single-day performance for the market since 1998, putting pressure on Jakarta to address MSCI concerns to prevent a formal downgrade.
Why it matters
MSCI indexes are used by global investors to allocate capital, meaning removal typically triggers large-scale sell-offs of a country's assets. The warning follows months of prior alerts from the index provider. Indonesia has previously attempted to support its own market with a $5 billion investment.
What is confirmed
- Indonesian stocks fell to a six-year low on Monday, October 19.
- MSCI warned that the Indonesian market could be cut from its global indexes.
- The market experienced its worst day since 1998 following the MSCI downgrade warning.
- Jakarta's benchmark stocks fell over 5 percent.
Still unconfirmed
- MSCI unnecessarily threw Indonesia into a panic.
- Indonesia is making a $5 billion bet on its own stock market.
What to watch next
- Jakarta's formal response to allay MSCI concerns
- Official decision from MSCI regarding the market's index status for next year
confidence 90%Sources used for this update (14)
- www.nytimes.com — The New York Times - Breaking News, US News, World News and Videos
- help.naver.com — Futures Flat As Oil Rebounds After Trump's "Energy Ceasefire" Unravels, Memory Stocks Slide | ZeroHedge
- www.marketscreener.com — Global Stocks Fall on Higher Oil Prices, AI Pullback | MarketScreener
- 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 — What Happens If Indonesia Is Removed From MSCI’s Global Indexes?
- Reuters — Indonesia faces rare MSCI exclusion that could cut it off from global capital
- Bloomberg.com — MSCI Ignites Indonesia Market Reckoning After Months of Warnings
- Breakingviews — MSCI unnecessarily throws Indonesia into a panic
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