The Jakarta Composite Index (JCI) witnessed a significant downturn on Tuesday, plummeting by 3.78% to close at 4,904 points. This decline was fueled by substantial foreign investor sell-offs and mounting apprehension surrounding the forthcoming MSCI index review. The review, slated for November 11-12, could potentially alter the inclusion and weighting of Indonesian stocks in global investment indexes.
The impact was widespread, with 624 stocks declining, only 57 advancing, and 37 remaining unchanged. Trading volume soared to 27.15 billion shares, with transactions valuing Rp 11.72 trillion (approximately $645 million). Foreign investors notably contributed to the downward pressure, recording net sales of Rp 831.5 billion in the initial trading session.
Investors also kept a close watch on the meeting of Indonesia’s Financial System Stability Committee, which aimed to address the volatility in the stock market, the weakening rupiah, and the broader financial stability. These concerns were compounded by domestic economic issues, most notably the rise in food inflation to 5.81% in October from 5.03% in September, driven partly by supply disruptions linked to El Niño-related weather conditions. Meanwhile, core inflation eased to 2.56% from 2.84%, raising concerns over weaker household spending, particularly among lower- and middle-income consumers.
Adding to the negative sentiment was regional market weakness and global uncertainty surrounding technology investments. Concerns over rising costs associated with artificial intelligence development and uncertain returns further triggered selling pressure across several Asian markets.