October 27, 2025 | 04:49 pm
TEMPO.CO, Jakarta - Indonesia's Composite Stock Price Index (IHSG) plunged in the first trading session on Monday, October 27, 2025, erasing last week’s gains after climbing 4.5 percent. By the afternoon session, the IHSG had dropped 2.94 percent, or nearly 3 percent, to 8,028.
According to the Analyst Team of Mirae Asset Sekuritas Indonesia, the sharp decline was triggered by market jitters over Morgan Stanley Capital International’s (MSCI) reported plan to revise the free-float calculation of Indonesian stocks.
“The news about MSCI’s potential changes to free-float rules for Indonesian equities became the main factor behind today’s steep correction,” Mirae Asset Sekuritas said in a written statement.
Several large-cap stocks led the downturn. Shares of PT Barito Pacific Tbk. (BRPT) slumped 12.4 percent, PT Barito Renewables Energy Tbk. (BREN) fell 12.3 percent, and PT Petrosea Tbk. (PTRO) declined 11.9 percent.
“Conglomerate stocks, particularly those with large market capitalizations, put significant pressure on the index,” the Mirae team added.
All sectoral indices closed lower in the first session. The property sector posted the steepest loss with a 4.53 percent drop, followed by the energy sector, which declined 4.45 percent.
“The IHSG’s movement today runs counter to major Asian markets, which are mostly trading higher,” Mirae noted.
Last week, the IHSG closed at 8,271.7, up from 7,915.6 a week earlier. The Indonesia Stock Exchange (IDX) market capitalization also rose 3.31 percent to Rp15,234 trillion from Rp14,746 trillion in the previous week.
However, trading activity showed signs of cooling. The average daily transaction frequency fell 12.9 percent to 2.36 million from 2.71 million the week before, while the average daily transaction value dropped 18.86 percent to Rp22.28 trillion from Rp27.46 trillion. Trading volume also decreased by 19.7 percent to 30.47 billion shares from 37.95 billion shares.
Foreign investors recorded a net buy of Rp1.15 trillion at Friday’s close but have sold a net total of Rp47.31 trillion throughout 2025.
Meanwhile, PT Traze Andalan Futures Director Ibrahim Assuaibi said the IHSG’s drop deepened to 3.38 percent at 7,992 during the second trading session.
He attributed the decline partly to falling global oil prices, which weighed on banking stocks.
“The market is reacting to plunging oil prices, which have raised concerns about a decline in banks’ issuance of export L/Cs,” Ibrahim told Tempo on Monday.
The selloff also hit energy and other sectors, as investors remained cautious about the government’s Rp200 trillion fund allocation for the banking sector.
“The market is still in wait-and-see mode regarding whether the government’s Rp200 trillion injection can truly stimulate the real sector and boost economic growth. This remains a major challenge for Minister Purbaya,” he said.
The IHSG slump also coincided with the weakening of the rupiah. Ibrahim attributed the currency’s depreciation to weak domestic economic fundamentals but noted that both the stock and currency declines are likely temporary.
“The market is waiting for oil prices to recover. Once crude prices rebound, the IHSG could strengthen again,” he said.
Ilona Esterina and Rr Ariyani contributed to the writing of this article.
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