Indonesia’s stock market experienced a significant downturn on Tuesday, with the Jakarta Composite Index (JCI) plummeting 3.78% to close at 4,904 points. This decline was driven by substantial sell-offs from foreign investors and apprehensions about the upcoming MSCI index review.
The market saw widespread losses, as 624 stocks fell, while only 57 advanced and 37 remained unchanged. Trading volume was notably high, reaching 27.15 billion shares, with transactions valued at approximately Rp 11.72 trillion ($645 million). Foreign investors exacerbated the situation, registering net sales of Rp 831.5 billion during the initial trading session.
Investor caution was partly fueled by the impending MSCI Index Review scheduled for November 11–12. This review could impact the inclusion and weighting of Indonesian stocks in global investment indexes, adding to the uncertainty.
Additional economic concerns contributed to the negative market sentiment. Indonesia’s food inflation rose to 5.81% in October from 5.03% in September, influenced by supply disruptions related to El Niño weather conditions. Meanwhile, core inflation dropped to 2.56% from 2.84%, raising worries about diminished household spending, especially among lower- and middle-income groups.
Further weighing on investor confidence were regional market weaknesses and global technology investment uncertainties. Rising development costs in the artificial intelligence sector and unpredictable returns have led to selling pressure in several Asian markets.
Investors were also observing a meeting of Indonesia’s Financial System Stability Committee, anticipated to address stock market volatility, the weakening rupiah, and broader financial stability challenges.