Jakarta. Indonesia’s benchmark stock index plunged at Wednesday’s opening after MSCI removed more Indonesian stocks than expected in its May 2026 index review, while the rupiah extended losses to a fresh record low against the US dollar.

Jakarta Composite Index (JCI) fell 95 points, or 1.38%, to 6,763 in early trade on Wednesday, moving within a range of 6,747 to 6,769.

RTI data showed 1.18 billion shares traded in the opening minutes, with transaction value reaching Rp 682.86 billion ($38.93 million) across 94,198 trades. A total of 118 stocks advanced, while 315 declined and 203 were unchanged.

Market sentiment was pressured by the rupiah’s continued depreciation and concerns over reduced Indonesia weighting in MSCI indexes following the latest rebalancing announcement.

Phintraco Sekuritas noted that the rupiah weakened further to a fresh record low of Rp 17,525 per US dollar. The healthcare sector led losses with a 3.51% decline, while the basic materials sector posted the biggest gain at 1.85%.

“JCI is expected to test the 6,700 level today. Investors should remain cautious of further correction following the MSCI announcement and ahead of the long weekend holiday,” Phintraco Sekuritas wrote in its Wednesday research note.

The brokerage also said the MSCI May 2026 rebalancing removed more Indonesian stocks than previously anticipated by the market. “This is expected to become a negative short-term sentiment,” Phintraco added.

MSCI officially maintained its freeze on adding Indonesian constituents to the MSCI Global Standard Index in the May 2026 review. Six Indonesian stocks were removed from the index: AMMN, BREN, TPIA, DSSA, CUAN, and AMRT, with AMRT moved to the MSCI Small Cap Index.

Another 13 stocks exited the MSCI Small Cap Index, namely ANTM, AALI, BANK, BSDE, DSNG, SIDO, MIDI, MIKA, MSIN, TKIM, APIC, SSMS, and TAPG. In total, 18 Indonesian stocks were removed from MSCI index categories.

Kiwoom Sekuritas Indonesia said the decision raises the risk of further foreign outflows from the domestic market and adds pressure to JCI sentiment as the rupiah breaks beyond the psychological Rp 17,500 per dollar level. MSCI’s next review is scheduled for Aug. 12, 2026, with implementation effective Sept. 1, 2026.

External sentiment also weighed on the market after US inflation data came in above expectations. US consumer prices in April rose 0.6% month-on-month and 3.8% year-on-year, exceeding expectations of 3.7% and marking the highest level since May 2023. Core CPI increased 0.4% month-on-month and 2.8% annually, also above forecasts.

The rise in inflation was mainly driven by higher energy and gasoline prices amid escalating tensions involving Iran. The energy index climbed 3.8% month-on-month and 17.9% year-on-year, the highest since September 2022, while gasoline prices surged 28.4% annually. US gasoline prices now hover around $4.50 per gallon compared to $3.14 a year earlier.

Kiwoom said analysts have started raising expectations that the Federal Reserve could potentially raise interest rates again. According to CME Group data, traders still largely expect the Fed to keep rates unchanged this year, but markets are now pricing in more than a one-in-three chance of another rate hike by December. Higher interest rates generally weigh on equities and slow economic growth.

Investors are also monitoring the leadership transition at the Federal Reserve after the US Senate confirmed Kevin Warsh as a member of the Fed Board of Governors in a 51-45 vote.

Across Asia at 9:34 a.m. Jakarta time, Japan’s Nikkei rose 0.20% to 62,866, while South Korea’s Kospi climbed 0.82% to 7,706. Hong Kong’s Hang Seng fell 0.43% and China’s Shanghai SSE slipped 0.05%.

Wall Street closed mixed overnight as technology stocks retreated, ending a recent rally in US equities. The S&P 500 slipped 0.2% from its record high, the Dow Jones Industrial Average added 56 points or 0.1%, while the Nasdaq Composite fell 0.7% from its own all-time high.