Indonesia's market just lost 47% in 2026
Jakarta's stock market just had its worst two days since the Asian financial crisis, and the mechanism behind it isn't panic selling — it's a single index firm threatening to press delete on an entire country.
Listen to the same-day episode — Ep. 085
Indonesia's market just lost 47% in 2026
Jakarta's stock market just had its worst two days since the Asian financial crisis, and the mechanism behind it isn't panic selling — it's a single index firm threatening to press delete on an entire country.
📊 Today's Numbers
Jakarta Composite ▼ 5,185: six-year low, worst two-day drop since 1998
MSCI Indonesia Index ▼ 47% YTD: $5.6B in passive outflows still pending
Brent Crude ■ ~$110/bbl: Russia diesel deal caps downside, Middle East risk floors it
China Q3 GDP ▲ 4.5% YoY: beats forecast, retail sales doubled expectations
Nasdaq ▼ 5.5% last week: futures up 1.3% Monday as dip-buyers return
NY Fed Services Index ▼ -20.7: sharpest services contraction since March
📈 EQUITIES
Photo: Dapur Melodi
Indonesia's Market Craters 47% in 2026 as MSCI Eyes Full Removal
This isn't just a bad week for Indonesian stocks. MSCI proposed removing Indonesia directly from its emerging-market benchmarks to standalone status, a rare double downgrade that would force passive funds tracking trillions in assets to sell.
Jakarta Composite fell another 5% Monday, extending Friday's 11.57% collapse to a six-year low near 5,185, triggered by MSCI's Friday announcement
Goldman Sachs estimates $5.6 billion in forced passive outflows if the removal proceeds, equivalent to 18 days of average daily trading volume
Foreign equity holdings have already halved, dropping from $250 billion to $130 billion year-to-date, with rupiah depreciation adding pressure to import prices for fuel and food
MSCI cited shareholding data reliability and suspected coordinated trading — a final decision isn't expected until June 2027, meaning uncertainty hangs over the market for months
💬 The forced selling hasn't happened yet. The $5.6 billion MSCI outflow estimate is the number to watch — and FTSE Russell could pile on with another $2.7 billion if it follows suit.
🛢️ COMMODITIES
Photo: Michael Steinberg
Trump Waives Russia Sanctions. Diesel Is Still Up 70%.
Two days before Congress's Graham Act kicked in, Trump signed a national-interest waiver suspending tariffs of up to 500% on Russian goods and penalties for countries buying Russian oil. The relief for energy markets is real but slow-moving.
Brent crude held near $110/bbl Monday, as Houthi attacks on Saudi Arabia and a partially closed Strait of Hormuz offset the bearish signal from renewed Russian diesel supply
The 9 October diesel deal covers 4 million tonnes, with the first 300,000 tonnes arriving immediately and Treasury sanctions waived through April 2027
Diesel prices are still roughly 70% above their February 2026 level, before the US-Iran conflict, meaning hauliers and rural heating customers face months more of elevated costs before supply normalises
🏦 MACROECONOMIC
Photo: Lei Guo
China Beats on GDP, Retail Sales Nearly Triple Forecast
China's Q3 numbers came in ahead of expectations across the board, and the retail sales figure is the one worth paying attention to: 1.1% year-on-year against a 0.5% forecast, the first real sign of domestic consumer demand stirring after a long stretch of weakness.
Q3 GDP grew 4.5% year-on-year, up from Q2's three-year low of 4.3%, with quarterly growth of 1.2% beating consensus
China's monthly trade surplus hit a record $133.5 billion, driven by AI-related technology exports — a number that will accelerate tariff pressure from the US and Europe
Shanghai Composite added a modest 0.2% on the data, suggesting markets already had a partial beat priced in
💬 The record trade surplus is the other side of the recovery story: China's consumers may be spending more, but its exporters are shipping even faster — and that imbalance is exactly what trade hawks on both sides of the Atlantic have been waiting to cite.
📰 Also Today
AI Chip Rout: The Nasdaq lost 5.5% last week as AI and semiconductor stocks collapsed — the Philadelphia Semiconductor Index posted its longest losing streak since 2008 — but Nasdaq 100 futures bounced 1.3% early Monday, with the S&P 500 sitting at 7,659 and the 10-year Treasury yield at 5.1%.
Eurozone Inflation Hits 3.8%: September CPI reached a three-year high of 3.8% year-on-year, with core at 2.5% and month-on-month prices up 0.6% across energy, services, and food simultaneously — the ECB meets 29 October with its deposit rate still at 2.0%, and the Governing Council now has very little cover to hold again.
NY Fed Services Crashes to -20.7: New York services activity plunged from -8.7 in September to -20.7 in October, the weakest since March, with rising input costs and a deeply pessimistic outlook — Fed Chair Warsh declined to signal an October hike, leaving the funds rate at 3.75–4.0% ahead of the 27–28 October FOMC meeting.
🎧 Listen to today's episode — The Open Bell
The MSCI Indonesia decision won't be final until June 2027, but the $5.6 billion overhang is moving markets right now — worth sharing today while the story is still developing.
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Not investment advice. For informational purposes only.