Jakarta Stocks Plunge 11 Percent on MSCI Proposal
Indonesian shares tumbled significantly and the rupiah weakened sharply after index provider MSCI proposed reclassifying the country as a standalone market. The potential change threatens to trigger massive outflows from passive funds tracking global indexes.
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Indonesia stocks plunged 11% on Friday morning after MSCI Inc proposed stripping the country of its emerging market status. The drop marks the steepest one-day decline for the Jakarta stock market since January 1998. The sweeping reclassification threatens to trigger massive capital outflows as passive index funds are forced to sell.
