Indonesia's stock-market crisis wipes billions from investor portfolios

2026, October 19

Indonesia

Indonesia's stock market suffered an unprecedented sell-off after global index provider MSCI warned that the country could lose its emerging-market classification. The Jakarta Composite Index fell sharply, extending losses from the previous trading session and reaching a six-year low. The latest market turmoil has wiped out tens of billions of dollars in market value and weakened investor confidence.

MSCI has raised concerns about market transparency, the availability of shares for public trading and possible irregular trading practices. Indonesia's stock exchange is seeking clarification from MSCI and has introduced measures to limit excessive daily share-price declines. A downgrade could force funds tracking emerging-market indexes to reduce or eliminate their Indonesian holdings.

Why it matters: Indonesia is Southeast Asia's largest economy. A prolonged crisis could reduce foreign investment, weaken its currency and increase financing pressures for businesses and the government.

Sources: Reuters — Indonesian exchange seeks to calm markets after record sell-off · Reuters — MSCI's concerns and the $65 billion market fallout