Indonesia’s stock market experienced a significant downturn on Tuesday, with the Jakarta Composite Index (JCI) plummeting 3.78% to 4,904 points. This decline was primarily driven by substantial foreign investor sell-offs and apprehensions surrounding the upcoming MSCI index review.
The market saw widespread losses, as 624 stocks fell while only 57 advanced and 37 remained unchanged. The day’s trading volume reached 27.15 billion shares, with transactions amounting to Rp 11.72 trillion (approximately $645 million). Foreign investors exacerbated the decline, registering net sales of Rp 831.5 billion during the morning trading session.
Investor caution was palpable ahead of the MSCI Index Review set for November 11–12, which could potentially alter the inclusion and weighting of Indonesian stocks in global investment indices. Additionally, market participants were keeping a close watch on a meeting of Indonesia’s Financial System Stability Committee, expected to address ongoing stock market volatility, the weakening rupiah, and broader financial stability concerns.
Domestic economic issues further contributed to the negative sentiment. Food inflation rose to 5.81% in October from 5.03% in September, a reflection of supply disruptions linked to El Niño-related weather conditions. Conversely, core inflation eased to 2.56% from 2.84%, sparking concerns about reduced household spending, particularly among lower- and middle-income consumers.
Adding to the market’s woes, regional market weakness and uncertainty over global technology investments weighed heavily on investor confidence. The rising costs of artificial intelligence development and uncertain returns triggered selling pressure across several Asian markets, compounding the challenges faced by Indonesian equities.