The Jakarta Composite Index opened sharply lower on Monday, 19 October 2026, falling 4.31 percent to 4,961.87 points. The drop followed an 11.6 percent plunge on Friday, 16 October 2026, when the index had closed at 5,863.78. The benchmark is now down 43 percent year to date.
Monday’s opening marked the index’s first return to the 4,900 level since the Covid pandemic, and its lowest since October 2020. The Indonesia Stock Exchange responded by cutting the auto rejection bawah, the daily lower trading limit, to 7 percent from 15 percent.
MSCI reclassification risk
The selloff comes as MSCI weighs moving Indonesia from emerging markets to standalone status, a step that could cut the country’s access to international capital flows. MSCI had already threatened in January to downgrade Indonesia to frontier market status over concerns about shareholding transparency and trading behaviour.
Goldman Sachs estimated that passive fund outflows could reach $5.6 billion, or roughly 100.8 trillion rupiah, if Indonesia is removed from the MSCI index. More than $8 billion in assets held by active funds are also benchmarked to the index. “The burden of proof has now shifted. To avoid reclassification, concrete evidence is needed that the announced reforms have been implemented consistently and materially improve market functioning,” Goldman Sachs strategists wrote in a research note cited via Reuters.
Foreign investors have sold a net $4.88 billion, or 87.84 trillion rupiah, of Indonesian shares so far in 2026. The market is valued at approximately $500 billion. Moody’s and Fitch earlier in the year revised the outlook on Indonesia’s sovereign debt rating to negative.
Analysts see limited room to fall further
Aninda Mitra, Head of Macro and Asia Investment Strategy at BNY Investments, said foreign exposure in Indonesian shares has shrunk considerably, so the room for further declines is likely not very large, but withdrawing large capital will be harder under current conditions.
Gary Tan, portfolio manager at Allspring Global Investments in Singapore, warned that market dislocation could lead to tighter financial conditions and a more meaningful impact on the real economy. The rupiah has weakened toward 18,000 per US dollar.
Related: Jakarta stocks slide as much as 11%, trading briefly halted · OJK pledges reforms as MSCI review weighs on Jakarta stocks
