The Jakarta Composite Index (JCI) suffered a sharp decline at the opening of trading on Wednesday morning (January 28, 2026). The index plunged 6.8% at the open, dropping to 8,369.48. About ten minutes into the session, the decline narrowed slightly as selling pressure eased, with losses trimming to around 4.55%.

Despite the brief recovery attempt, most stocks remained deep in negative territory. A total of 632 stocks declined, 274 were unchanged, and only 49 recorded gains. Several heavyweight stocks that typically support the index also fell sharply, with some hitting the lower auto-rejection limit. Shares such as Bukit Uluwatu Villa (BUVA), Rukun Raharja (RAJA), Darma Henwa (DEWA), Petrosea (PTRO), Dian Swastatika Sentosa (DSSA), Barito Pacific (BRPT), and Bumi Resources (BUMI) were among those locked at their lower limits.

According to Refinitiv data, all market sectors were in the red, with the property sector posting the steepest decline at 6.29%, followed by energy down 5.5% and technology sliding 3.66%.

The main drags on the index included DSSA, Barito Renewables Energy (BREN), Bank Central Asia (BBCA), Bayan Resources (BYAN), and Bank Rakyat Indonesia (BBRI). DSSA alone shaved 65.56 index points, while BREN contributed a 55.16-point drop, BBCA 45.39 points, BYAN 39.05 points, and BBRI 31.8 points. DCI Indonesia (DCII), BRPT, and BUMI also ranked among the top ten stocks weighing down the JCI during the morning session.

The sharp sell-off followed an announcement from Morgan Stanley Capital International (MSCI) regarding its assessment of the free float of Indonesian stocks within the MSCI Global Standard Indexes. In its statement, MSCI highlighted ongoing concerns among global investors over the transparency of share ownership structures in Indonesia, despite minor improvements in free-float data provided by the Indonesia Stock Exchange (IDX).

MSCI noted that some international market participants support the use of the Monthly Holding Composition Report issued by the Indonesian Central Securities Depository (KSEI) as supplementary data. However, many investors expressed significant concerns about KSEI’s shareholder classification, which they believe is not yet sufficiently reliable to support free-float assessments and investment eligibility.

According to MSCI, the core issues remain limited transparency in ownership structures and the potential for coordinated trading behavior that could disrupt fair price formation. As a result, MSCI emphasized the need for more detailed and reliable ownership information, including monitoring ownership concentration, to enable more robust free-float evaluations.

In response to these conditions, MSCI has implemented an interim treatment for Indonesian securities, effective immediately. This measure is intended to mitigate index turnover and investability risks while awaiting improvements in transparency from market authorities.

Under this temporary policy, MSCI will freeze any increases in the Foreign Inclusion Factor (FIF) and the Number of Shares (NOS) resulting from index reviews or corporate actions. In addition, no Indonesian stocks will be added to the MSCI Investable Market Indexes (IMI), and upward migrations between size segments, including from Small Cap to Standard, will be suspended.

These developments raise the possibility of a reduced weighting for Indonesian equities in the MSCI Emerging Markets Indexes. MSCI has also indicated the potential for Indonesia to be reclassified from an emerging market to a frontier market, subject to a market consultation process.

Investment Analyst at Infovesta Kapital Advisori, Ekky Topan, said the MSCI announcement could heighten market volatility and trigger foreign outflows, particularly in stocks sensitive to index-based fund flows. He noted that many Indonesian stocks had previously risen on expectations of MSCI inclusion, making local investors highly reactive to MSCI-related news. According to him, today’s market movement reflects a clear case of panic selling.