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Indonesia's Jakarta Composite Plunges 11.6% After MSCI Downgrade Warning
Indonesia's stock market fell ~11.6% on Oct 16 (biggest one-day drop in nearly 30 years) after MSCI warned of potential reclassification from emerging to standalone status. The move risks excluding Indonesian stocks from global indexes, potentially triggering $4B+ in passive outflows.
TLDR
A standalone status would isolate Southeast Asia's largest economy from global capital flows, risking further currency and bond weakness. It represents a rare escalatory action by MSCI, comparable to markets like Lebanon and Zimbabwe, with ripple effects across regional financial confidence.
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