Indonesian stocks tumble to five-year low, rupiah drops to record

[SINGAPORE/JAKARTA] Indonesian stocks slumped to their lowest level in five years while the rupiah reached another record low, underscoring investor concern that persistently high oil prices are straining the country’s finances.

The benchmark Jakarta Composite Index (JCI) plunged as much as 5.2 per cent to its lowest since May 2021. Materials led the declines, with a subgauge of the sector tumbling more than 10 per cent.

The rupiah weakened about 0.5 per cent against the US dollar, leading losses in Asia, as Brent crude prices advanced for a third day.

The moves come after data on Tuesday (Jun 2) showed Indonesia’s trade surplus nearly vanished in April as soaring prices for imported oil and gas outpaced export gains. Consumer prices rose 3.08 per cent in May from a year earlier, exceeding the median estimate in a Bloomberg survey of economists and moving further above the midpoint of Bank Indonesia’s 1.5 to 3.5 per cent target.

Investor confidence in local assets has been waning, owing to concerns over fiscal slippage due to elevated oil prices, a potential MSCI market reclassification this month and risks of credit rating downgrades.

Down about 32 per cent in 2026, the JCI is already the worst performer this year among more than 90 global equity indexes tracked by Bloomberg.

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Concerns that Indonesia’s credit rating and outlook “might be downgraded due to higher risk of a widening fiscal deficit” are weighing on stocks, said Henry Wibowo, a former JPMorgan & Chase strategist who co-founded Alphagate Capital in Jakarta.

Weakness in the rupiah, which is approaching the 18,000-per US dollar mark, is also adding to the pressure, he added.

Worries about tighter government control of the nation’s key commodity sector have also weighed on investor sentiment in recent weeks. President Prabowo Subianto announced in May that the administration would take direct control of exports of some of Indonesia’s most important commodities. BLOOMBERG