Indonesian stocks dive 11% as MSCI weighs market reclassification

MSCI said on Friday (Oct 16) it plans to downgrade Indonesia to "standalone" status, sparking a sell-off.

People sit near an electronic board showing stock market index at the Indonesia Stock Exchange in Jakarta, Indonesia, on Feb 2, 2026. (File photo: Reuters/Willy Kurniawan)

JAKARTA: Indonesian stocks plunged more than 11 per cent on Friday (Oct 16) as index compiler MSCI said it was "no longer appropriate" to maintain the country's emerging-market status, fuelling fears of an exodus of foreign investment.

Indonesian equities have struggled since January when MSCI froze Indonesia in its indexes and threatened a downgrade to "frontier" status because of opacity in ownership and trading behaviour.

On Friday, MSCI said reforms to address those problems have not made sufficient progress and that even a downgrade to frontier wouldn't reflect the severity of issues.