FX.co ★ Indonesian Stocks Drop Sharply Amid Inflation and Trade Concerns

The Indonesia Stock Exchange (IDX) Composite fell 70 points, or 1.4%, to 5,028 in early Tuesday trade, erasing the previous day’s gains amid broad-based declines across major sectors, led by energy, infrastructure, basic materials, and property. Market sentiment weakened after October food inflation rose to a five-month high, driven by persistent El Niño-related supply disruptions, even as headline inflation eased slightly and remained within the central bank’s target range.

At the same time, the country’s trade surplus remained under pressure as imports continued to outpace exports, despite a stronger-than-expected reading in September. In the U.S., stock futures were mixed ahead of the midterm elections and several key economic data releases.

Losses on the Indonesian market were partially cushioned by a major bourse reform that excluded 81 stocks with high shareholding concentration from benchmark index calculations, following MSCI’s warnings about a potential reclassification of the market. Notable decliners included Medco Energi (-5.1%), Telkom Indonesia (-4.3%), and Bank Tabungan Negara (-3.4%).