Indonesian stocks plunge as MSCI downgrade fears deepen

Indonesian stocks plunged further today as fears of a potential MSCI downgrade deepened, according to Nikkei Asia. A downgrade by the global index provider could force passive funds that track its benchmarks to reduce Indonesian holdings, potentially amplifying outflows and price swings. The prospect has rattled sentiment across Jakarta’s market as traders rush to hedge exposure and reassess risk.

Nikkei Asia says anxiety centers on possible changes to Indonesia’s standing within MSCI’s widely followed indices, which can influence country weights and capital flows. Market participants are watching for signals from MSCI and local regulators on timing, criteria, and any measures to steady trading and reassure foreign investors. Focus now turns to MSCI’s next communication and whether policymakers in Jakarta outline steps to calm volatility. [Developing. This article will be updated.]