Indonesian stocks plunge to six-year low as MSCI downgrade fears mount
Indonesian benchmark stocks plunged to their lowest level in six years after index provider MSCI warned it is considering shifting the country from emerging markets to standalone status. The market fell 11.6 percent on Friday and dropped over 5 percent in early trading Monday. This selloff has wiped out billions in market value and sent the rupiah to a record low. Investors are reacting to the threat of expulsion from major indexes, which could trigger significant capital flight from the region.
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- ✓ Indonesian benchmark stocks reached their lowest level in six years.
- ✓ MSCI is considering shifting Indonesia from emerging markets to standalone status.
- ✓ The Indonesian stock market fell 11.6 percent on Friday.
- ✓ Jakarta's benchmark stocks fell over 5 percent in early trading on Monday.
What changed
MSCI issued a warning regarding a potential reclassification of Indonesia to standalone status.
Live updates
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Indonesian Stocks Hit Six-Year Low Amid MSCI Downgrade Fears
Indonesian benchmark stocks plunged to their lowest level in six years after index provider MSCI warned it is considering shifting the country from emerging markets to standalone status. The market fell 11.6 percent on Friday and dropped over 5 percent in early trading Monday. This selloff has wiped out billions in market value and sent the rupiah to a record low. Investors are reacting to the threat of expulsion from major indexes, which could trigger significant capital flight from the region.
Why it matters
MSCI classifications dictate how passive funds allocate capital globally. A move to standalone status would likely remove Indonesia from broad emerging market portfolios. The government has previously committed $5 billion to support its own stock market.
What is confirmed
- Indonesian benchmark stocks reached their lowest level in six years.
- MSCI is considering shifting Indonesia from emerging markets to standalone status.
- The Indonesian stock market fell 11.6 percent on Friday.
- Jakarta's benchmark stocks fell over 5 percent in early trading on Monday.
Still unconfirmed
- An MSCI reclassification could result in $5.6 billion in passive-fund outflows.
- The rupiah has reached a record low due to the stock market crash.
What to watch next
- Official MSCI decision on Indonesia's index classification
- Government response to the potential downgrade
- Further movements in the rupiah exchange rate
confidence 95%Sources used for this update (13)
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- The New York Times — Indonesian Stocks Plunge on Threat to Drop Market From Major Indexes
- Fortune — Indonesia's $5 billion bet on its own stock market
- CNBC — Indonesian stocks plunge to six-year low as MSCI downgrade fears mount
- Reuters — 'Panic' selling hits Indonesian markets on MSCI expulsion threat
- Bloomberg.com — Indonesian Stocks Tumble to Lowest Since 2020 After MSCI Warning
- www.cnbc.com — Indonesian stocks: MSCI downgrade fears mount - CNBC
- digg.com — Indonesian stocks plunge to six-year lows on MSCI downgrade fears · Digg
- www.thejakartapost.com — Indonesian stocks slide to six-year low as MSCI 'standalone ...
- www.straitstimes.com — Indonesia stocks hit six-year low on MSCI warning | The ...
- finance.yahoo.com — Indonesia stocks hit six-year low as MSCI warning deepens selloff
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