Indonesia’s stock market experienced a significant downturn on Tuesday as the Jakarta Composite Index (JCI) fell by 3.78%, closing at 4,904 points. This decline is attributed to a substantial sell-off by foreign investors and mounting concerns regarding the upcoming MSCI index review.

The market witnessed widespread losses, with 624 stocks declining while only 57 saw gains and 37 remained unchanged. The trading volume hit 27.15 billion shares, amounting to transactions worth Rp 11.72 trillion (approximately $645 million). Foreign investors were a major factor in driving the market down, recording net sales of Rp 831.5 billion during the first trading session.

Investors are on edge as they anticipate the MSCI Index Review set for November 11–12. This review could potentially alter the inclusion and weighting of Indonesian stocks in global investment indexes, adding to market uncertainty. Additionally, attention is focused on a meeting of Indonesia’s Financial System Stability Committee, which is expected to address issues related to stock market volatility, the weakening rupiah, and broader financial stability.

Domestic factors also contributed to the negative market sentiment. Food inflation rose to 5.81% in October, up from 5.03% in September, driven partly by supply disruptions linked to El Niño-related weather conditions. At the same time, core inflation eased to 2.56% from 2.84%, sparking concerns about diminished household spending, particularly among lower- and middle-income consumers.

Regional market dynamics further exacerbated investor apprehensions, with uncertainties over global technology investments impacting confidence. Rising costs associated with artificial intelligence development and unclear returns have led to increased selling pressure across several Asian markets.