Indonesia stocks sink most since 1998 after MSCI flags ‘standalone’ downgrade

BENGALURU: Indonesian stocks suffered their steepest one-day fall in nearly three decades on Friday after MSCI said the country was no longer worthy of “emerging market” status, threatening billions of dollars in capital outflows from Southeast Asia’s largest economy.

South Korea’s benchmark KOSPI rebounded from a 6-month closing low hit in the previous session, but remained on track for its biggest weekly loss in 18 years following a brutal selloff earlier in the week on AI worries.

Stocks in Taiwan also edged higher after an over 3 percent decline the previous day, while its dollar weakened to late-July lows of 32.518 per US dollar.

Indonesia’s equity index plunged as much as 11.4 percent to its lowest point since early November 2020, clocking its worst one-day drop since January 1998. Earlier in the day, the benchmark opened 8 percent lower, which triggered a 30-minute trading halt.

Major banks in the country, including Bank Central Asia, Bank Rakyat Indonesia and Bank Mandiri each plunged nearly 15 percent. The rupiah weakened to 18,070 per US dollar, its lowest level since late July and approaching its lifetime low of 18,190.

Stocks in Malaysia slipped 0.7 percent. An official advance estimate showed the Malaysian economy grew 5.3 percent year-on-year in the third quarter.