Indonesia's JCI Drops as Much as 1.49%, Extending Losses Below 4,900

Declines outnumber gains at the open

The Jakarta Composite Index (JCI) was initially down 0.97% at 4,856, then widened its loss to as much as 1.49%. Its early trading range was 4,824 to 4,885.

RTI data showed 420 stocks falling, compared with 73 rising and 117 unchanged. In the opening minutes, investors traded about 1.58 billion shares through 59,820 transactions valued at Rp 456.19 billion ($25.18 million).

In its Wednesday research note, Phintraco Sekuritas identified 4,650-4,750 as a possible technical test range for the day if support at 4,900 failed to arrest the decline.

Tuesday's losses and nickel restrictions

The latest fall followed a 3.78% drop on Tuesday, November 3, when the JCI closed at 4,904 and every sector finished lower. Declining stocks outnumbered gainers 624 to 57. Turnover totaled 27.15 billion shares worth Rp 11.72 trillion ($645.23 million), while BRI Danareksa Sekuritas reported Rp 831.5 billion in foreign net selling during the first trading session.

Basic materials led Tuesday's sector losses with a 6% decline, largely reflecting falls in nickel- and gold-related shares. Phintraco linked the weakness to plans to restrict domestic nickel output in support of prices, as well as a pullback in gold prices.

Indonesia's national nickel production quota for 2026 is capped at 250 million to 260 million tons, compared with 379 million tons under the 2025 RKAB framework. On July 10, the ESDM Ministry ruled out comprehensive quota additions, with exceptions limited to domestic smelters facing raw material shortages. The deadline for RKAB revision requests was July 31.

MSCI review follows a steep October decline

The market entered November after substantial October losses. Mirae Asset Sekuritas said MSCI began a consultation on October 15 about moving Indonesia from Emerging Market to Standalone Market status. The next day, the JCI plunged 11.6%, its largest one-day loss since 1998. It finished October down 16.7%, while foreign net outflows increased to Rp 16.9 trillion from Rp 10.2 trillion in September.

MSCI's November index review is scheduled for release on November 12, with changes taking effect November 30. Under the freeze, constituent changes can only be downward, according to Mirae.

The brokerage put the probability of BRMS leaving the Standard index at about 90%, with a move to Small Cap considered likely. It assigned roughly a 40% chance to BRPT's outright deletion. Those potential changes imply passive outflows of up to Rp 1.2 trillion, Mirae estimated.

Growth forecast cut alongside signs of resilience

Phintraco also cited a less favorable domestic outlook after the Financial System Stability Committee (KSSK) cut its 2026 growth forecast to 5.4%-5.5%, citing growing external pressures on Indonesia's economy. Finance Minister Suahasil Nazara announced the revision in Jakarta on November 3; the previous forecast, issued in August, was 5.6%-6.0%.

The committee nevertheless pointed to indicators of resilience. September car sales rose 28.1% from a year earlier, and motorcycle sales increased 15.4%. The Manufacturing Purchasing Managers' Index climbed from about 52 in September to 54 in October.

Phintraco said the lower growth projection could temper expectations for corporate earnings, especially in consumer goods, retail and property, where purchasing power and economic activity are important. Separately, Pilarmas Investindo Sekuritas reported that food inflation rose to 5.81% in October from 5.03% in September. Core inflation moved in the opposite direction, easing to 2.56% year over year from 2.84%.

Tax clarification and proposed currency rules

On tax policy, Phintraco highlighted the finance minister's statement that no new tax collection scheme would be introduced on November 9, 2026. That clarification covered reports of digital tax collection through banks, fintech companies and e-commerce platforms. The brokerage expected it to reduce business and public concerns about possible increases in digital transaction costs.

The government is also preparing amendments to the rules governing foreign exchange proceeds from natural resources, known as DHE SDA. The proposed changes would encourage exporters to convert more of their U.S. dollar earnings into rupiah.

Phintraco expected the policy to bolster liquidity and the domestic financial market's resilience, but said its effect on exporters' flexibility in managing liquidity would need monitoring.

Asian markets fall as investors watch U.S. events

Stocks elsewhere in Asia were also lower on Wednesday. At 9:39 a.m. Jakarta time, the Nikkei 225 was down 3.54% in Japan and South Korea's Kospi had lost 1.67%. Hong Kong's Hang Seng was off 0.48%, while the Shanghai Composite was down 0.53%.

The regional declines came after a mixed Tuesday session on Wall Street. The S&P 500 added 0.4% and the Nasdaq Composite rose 0.8%, but the Dow Jones Industrial Average lost 197 points. Kiwoom Sekuritas Indonesia attributed most of the gains to a recovery in semiconductor shares following losses in the preceding session.

Kiwoom described sentiment as mixed ahead of the U.S. midterm elections. Prediction markets assigned about a 74% probability to Democrats taking control of the Senate and also viewed their prospects for winning the House of Representatives as relatively high. The brokerage said investors expected possible short-term volatility because the results could influence fiscal policy and government spending.

A stronger-than-forecast Job Openings and Labor Turnover Survey (JOLTS) report underscored the U.S. labor market's resilience. Investors were also watching for Advanced Micro Devices' earnings for signals about the semiconductor and artificial intelligence industries, along with the U.S. employment report due at the end of the week.