Indonesian stocks tumble amid MSCI concerns

By Alimat Aliyeva

Indonesia’s IDX Composite index plunged 8% on Wednesday after MSCI (formerly Morgan Stanley Capital International) announced it would stop adding Indonesian stocks to its emerging markets indexes. The decision was driven by concerns over limited transparency, insufficient free float, and restricted market accessibility, Azernews reports, citing foreign media.

MSCI also stated that it would freeze adjustments to the weighting of Indonesian stocks that are already included in its indexes, a move that could further reduce foreign investor interest.

As a result, the IDX Composite fell 8% by 7:43 a.m. CET, reaching its lowest level since November, amid heavy selling pressure and heightened market volatility.

MSCI index decisions often have an outsized impact on emerging markets, as trillions of dollars in global investment funds track its benchmarks. Even small changes in index inclusion can trigger massive capital inflows—or sudden withdrawals—within hours.

The sharp decline underscores how sensitive emerging markets like Indonesia are to shifts in global investor confidence and international index policies.