Indonesian Stocks Plunge as MSCI Threatens to Drop Market from Indexes

Indonesian stocks suffered their biggest one-day plunge since the 1998 Asian financial crisis on Friday, after the index provider MSCI warned that it could drop the country from benchmark indexes, which guide investment decisions by fund managers around the world.

The stock market in Jakarta dropped more than 11 percent, at one point triggering a trading halt because of volatility, deepening investor fears about the fragility of Southeast Asia’s largest economy. Indonesia’s exchange has lost nearly 40 percent of its value this year, making it one of the world’s worst-performing stock markets.

MSCI said on Thursday that it had launched a consultation on whether to downgrade Indonesia’s market classification by two rungs, from “emerging market” to “stand-alone” status. That was a marked escalation from earlier this year, when it had considered dropping the country one level, to “frontier market.” When a country reaches “stand-alone” status, its market is removed from all MSCI indexes, which are tracked by trillions of dollars in investments.

“It took us and the market by surprise,” said Gary Tan, a portfolio manager in charge of emerging equities at Allspring Global Investments in Singapore.

Article source: https://www.nytimes.com/2026/10/16/business/indonesia-stocks-economy.html