Jakarta Index Falls 3.21% to 5,112.65 as Bond Yields Rise
Key Facts
The Jakarta Composite Index closed down 3.21% at 5,112.65 points on October 29, after ending the previous session at 5,282.31 points, according to Investing.com data. The decline came on a day when the yield on Indonesia’s 10-year government bonds remained at 7.707%, its highest level since mid-May 2020, according to a report published by The Edge Malaysia citing Reuters. The report linked the rise in yields this year to oil prices and concerns about MSCI’s review of Indonesia’s market status. The stock decline therefore coincided with government borrowing costs at a level not seen for more than six years. The move puts the impact of market-classification concerns on capital flows at the forefront of investors’ attention.
Indonesia’s 10-year bond yield has risen by more than 150 basis points since the start of 2026 through October 29, Reuters reported. The report attributed the increase to higher oil prices and investor concern over a proposal MSCI is considering regarding Indonesia’s market status. On October 15, MSCI said it had opened consultations on a proposal to downgrade Indonesia from an emerging market to a standalone market, according to the Associated Press. The proposal raised concerns about the potential outflow of billions of dollars in capital if the downgrade proceeds, the agency reported. Bond and equity pressures were thus linked in reports to the market-classification issue and oil prices, while inflation concerns were not among the cited reasons for the decline.
Economist Fikro Fulfian said higher yields could help the rupiah attract foreign investors to Indonesia’s debt market and strengthen capital inflows. This view offers another perspective on the rise in yields, which the report linked to higher oil prices and concerns about the MSCI review: higher borrowing costs may weigh on the market, but could make debt instruments more attractive to foreign investors. The Edge Malaysia quoted Fulfian as saying that higher yields “could support the rupiah by attracting foreign investors back to Indonesia’s debt market and strengthening capital inflows.” Regionally, the MSCI Emerging Markets Asia Index fell 1% on October 29. Reuters said South Korea and Taiwan, which together account for more than half of the index, weighed on it as technology shares fell.
October’s losses follow a steeper decline in the Indonesian index on October 16, when it closed down 11.57%, its biggest daily drop since January 1998, according to Reuters via MarketScreener. That came a day after MSCI announced it had opened consultations on a proposal to change the market classification, in a context that raised concerns about billions of dollars in capital outflows. Indonesian President Prabowo Subianto said his country “fears no one and will never back down” in the face of external pressure related to MSCI’s warning, then a government spokesperson clarified that his remarks were a call for dialogue, according to the Associated Press. This sequence shows that classification concerns were part of the public debate about the market during October, alongside sharp share-price moves and rising bond yields.
Bank Indonesia raised interest rates 3 times between May and June 2026, according to Reuters, and is scheduled to hold its next meeting in mid-November. Ahead of the meeting, the bank’s calendar lists the release of inflation data and trade balance, exports and imports data on November 2; the trade balance data cover September. The calendar also sets November 5 for the release of Indonesia’s third-quarter economic growth data. These upcoming dates provide checkpoints for monitoring the economy ahead of the central bank meeting, following the series of rate increases in May and June. The data release dates and November meeting remain the next scheduled events in the reports and calendar cited.