MSCI Affirms Indonesia's Emerging Market Status, Warns Dollar Surge Could Disrupt Rally

Indonesia’s financial market is expected to move positively on Wednesday (24/6/2026), particularly following MSCI’s announcement that it will maintain Indonesia’s emerging market status. The Jakarta Composite Index (IHSG) weakened in trading on Tuesday (23/6/2026), amid cautious market sentiment as participants awaited the MSCI announcement. At the close of the second session, the IHSG fell 0.25%, or 15.36 points, to 6,101.33. During trading, the IHSG was pressured deeper, touching a level of 5,993.04. Transaction value was relatively busy, reaching Rp32.94 trillion with a trading volume of 41.54 billion shares across 1.79 million transactions. A total of 282 stocks rose, 373 stocks fell, and 160 stocks were stagnant. The most actively traded stocks were PT Dian Swastatika Sentosa Tbk (DSSA), PT Chandra Asri Pacific Tbk (TPIA), PT Bank Central Asia Tbk (BBCA), PT Bank Rakyat Indonesia (Persero) Tbk (BBRI), and PT Bank Mandiri (Persero) Tbk (BMRI). The majority of trading sectors actually strengthened. However, heavy pressure from several sectors and large-cap stocks kept the IHSG in the red. The deepest correction was recorded by the energy sector, which fell 3.62%. Other sectors that weakened significantly were financials and consumer goods. Specifically, shares of PT Bayan Resources Tbk (BYAN), which entered its ex-date dividend period, were the main drag on the IHSG, contributing a 20.66 index point decline. Other stocks weighing on the IHSG included BBCA, BMRI, and PT Merdeka Copper Gold Tbk (MDKA). Turning to the exchange rate, pressure in the stock market was in line with the rupiah’s depreciation. The rupiah closed Tuesday’s trading in the red against the US dollar, weakening amid a global dollar rally. Throughout the day, the rupiah moved in a range of Rp17,835-Rp17,870/US.ThecurrencyopenedatRp17, 850/US, then weakened further before the pressure eased towards the close. The rupiah’s depreciation was still influenced by external sentiment, particularly the dynamics of the US dollar’s global strengthening. The greenback’s rally limited the room for appreciation of other currencies, including the rupiah. The US dollar strengthened amid ongoing market concerns about the potential for higher-for-longer interest rates in the United States. This condition emerged after the US central bank (The Federal Reserve) maintained its benchmark interest rate in the range of 3.50%-3.75%. Additionally, the Fed’s latest interest rate projections, or dot plot, indicated the likelihood of high rates persisting longer. Some Fed officials still foresee the potential for a rate hike at the next meeting. However, the dollar’s rally was capped by positive developments in US-Iran negotiations. Hopes for peace between the two countries limited pressure on risky assets somewhat, although market uncertainty has not fully subsided. In the bond market, the yield on the 10-year government bond (SBN) rose to 7.218% on Tuesday, marking the fourth consecutive trading day of increases. Wall Street closed lower on Tuesday, or early Wednesday Indonesian time. Pressure mainly came from a sell-off in technology stocks, particularly those related to memory chips and artificial intelligence (AI). The S&P 500 fell 1.44% to 7,365.46. The tech-heavy Nasdaq Composite corrected deeper, down 2.21% to 25,587.04. The Dow Jones Industrial Average (DJIA) fell 45.87 points, or 0.09%, to 51,666.84. The pressure on Wall Street was a continuation of the tech sector’s weakness from the previous session. On Monday, the Nasdaq had already fallen 1.3%, mainly due to pressure on Alphabet shares. The sell-off then spread to global markets, particularly in Asia. South Korea’s Kospi index was one of the hardest hit after memory chip-related stocks collapsed. Shares of SK Hynix, which had been a driver of the AI-fuelled rally in South Korea, plunged more than 12%. The pressure caused the Kospi to fall nearly 10% at one point, despite the benchmark index still recording a gain of around 95% for the year. In Japan, the Nikkei 225 also fell 3.55%, snapping an eight-day winning streak. On Wall Street, pressure on chip stocks was also evident. Micron Technology shares traded in the US fell 13%. Sandisk also corrected 13%, while Seagate Technology fell more than 5%. Other chip and semiconductor stocks were pressured. Intel fell 6%, while Advanced Micro Devices (AMD) and Qualcomm fell nearly 6% and 8%, respectively. The heavy pressure on the tech sector caused the State Street Technology Select Sector SPDR ETF (XLK) to fall 4%. The VanEck Semiconductor ETF (SMH), which tracks semiconductor stocks, fell 7%. However, pressure on the main Wall Street indices eased from their lowest levels as some tech stocks outside the chip sector, such as Microsoft and Amazon, managed to gain. Defensive stocks also helped limit deeper losses. Walmart, Procter & Gamble, and Johnson & Johnson rose, while International Business Machines (IBM) shares surged 5% after receiving an upgrade to overweight from JPMorgan. Sherwin-Williams and Merck shares also gained. Alphabet shares continued to weaken, falling 1% on Tuesday. The Google parent had previously fallen 5% on Monday due to market concerns over the departure of several key AI talents from the company.