Indonesia stocks hit 6-year low after MSCI downgrade threat
Why it matters: Goldman Sachs estimated a full MSCI removal could trigger $5.6 billion in passive outflows.
Indonesian stocks fell to a six-year low after MSCI warned it could move the country from emerging-market status to standalone, a sharper threat than an earlier possible shift to frontier status. The Jakarta Composite Index dropped more than 5% on Monday after tumbling 11.6% on Friday, its worst session since 1998, while the rupiah weakened near a record low. The Indonesia Stock Exchange cut its lower auto-rejection limit to 7% from 15% and scheduled talks with MSCI to seek clarification. MSCI cited market dysfunction, including coordinated trading behavior and weak rule enforcement. Exchange data showed Friday's selloff erased about $65 billion in market value.