FX.co ★ Indonesia Stocks Drop Further on Factory Exit Concerns

Indonesia’s shares fell 37 points, or 0.6%, to 6,080 in early Tuesday trade, extending losses after a tech-led decline on Wall Street overnight ahead of key U.S. inflation data later this week. Market sentiment deteriorated further on reports that major Japanese automakers may shift production from Indonesia to Vietnam, stoking fears of large-scale job losses. At the same time, recent power outages in Java highlighted ongoing infrastructure vulnerabilities.

Investors are also bracing for MSCI’s upcoming review later this week, which will determine whether Indonesia is downgraded to frontier market status—a decision that could prompt substantial capital outflows.

Some of the downside pressure was tempered by Finance Minister Purbaya Yudhi’s comments that May macro indicators remain solid, pointing to robust manufacturing PMI readings, 14.8% year-on-year growth in M0, and an 11.5% expansion in bank lending.

Most sectors traded lower, led by transportation, industrials, and healthcare. Among the notable laggards were Transcoal Pacific (-9.3%), Bukit Asam (-3.9%), Bank Jago (-3.7%), and Harum Energy (-2.4%).