Indonesia Stocks Plunge Toward Trading Halt as Investor Panic Deepens Over Policy Fears

JAKARTA, Investortrust.id — Indonesia’s stock market spiraled deeper into panic selling on Thursday afternoon, with the benchmark Jakarta Composite Index, known locally as the IHSG, plunging 3.38% at the opening of the second trading session and edging dangerously close to an exchange trading halt.

The selloff wiped the index down to as low as 6,080 before stabilizing slightly around 6,104, after already falling 2.76% during the morning session.

The collapse cements Indonesia’s position as one of the world’s worst-performing equity markets this year, with the index now down nearly 30% year-to-date.

The rout signals a dramatic erosion of investor confidence in Southeast Asia’s largest economy at a time when global emerging markets are broadly rebounding.

While rising geopolitical tensions in the Middle East and a stronger U.S. dollar have pressured risk assets globally, investors are increasingly pointing to domestic policy concerns in Indonesia — especially fears that state intervention in commodity exports could hurt efficiency, weaken corporate competitiveness, and reduce market transparency.

The selloff also threatens to amplify pressure on the rupiah, which has already weakened to around Rp 17,686 per U.S. dollar, far below the government’s 2026 budget assumption of Rp 16,500.

Indonesia’s market losses were led by shares linked to some of the country’s largest conglomerates.

Shares of Chandra Asri Pacific, traded under ticker TPIA, plunged 14.74%, while renewable energy company Barito Renewables Energy, ticker BREN, sank 7.62%.

Other major decliners included infrastructure and energy holdings tied to Indonesia’s billionaire elite, including BRPT, CUAN, DSSA and AMMN.

The broad-based collapse hit nearly every major sector. Basic materials stocks cratered 7.44%, energy dropped 6.01%, transportation slid 4.69%, while infrastructure and consumer staples each lost more than 5%.

Under Indonesia Stock Exchange rules, trading can be temporarily halted if the benchmark index falls 8% in a single session.

Words of Assurance

Despite the market turmoil, acting Indonesia Stock Exchange President Director Jeffrey Hendrik attempted to reassure investors, arguing that Indonesia’s long-term economic fundamentals remain intact.

“Investment in the capital market is a long-term investment. We continue to believe Indonesia’s economic fundamentals will improve going forward,” Jeffrey said at the Indonesia Stock Exchange building in Jakarta on Thursday.

Jeffrey added that Indonesian authorities are accelerating business permit approvals and investment reforms under President Prabowo’s administration.

“There was also a message from the President that business licensing and permits will be simplified, from processes that used to take two years to potentially just weeks,” he said.

Market in Doubts

Still, markets appeared unconvinced.

Investor anxiety intensified after the government formally moved to centralize exports of strategic natural resources through a newly established state-controlled mechanism under Danantara Sumberdaya Indonesia.

The new policy would give the state a dominant role in exports of coal, crude palm oil and ferroalloys, with officials arguing the move is necessary to combat transfer pricing abuse, under-invoicing and foreign exchange leakage estimated at roughly $150 billion annually.

Indonesia’s Energy Minister Bahlil Lahadalia said this week that future mineral and coal exports would eventually flow through government-designated entities.

“All minerals will later go through Danantara,” Bahlil said Wednesday during the IPA Convex 2026 event near Jakarta.

Business groups, however, fear the new structure could slow transactions, create additional bureaucracy and drive international buyers toward rival suppliers such as Malaysia and Vietnam.

“Markets do not reject stronger governance,” the analysis said. “But markets always punish policies perceived as reducing efficiency, increasing intervention, and creating uncertainty.”

The market turbulence comes just one day after Bank Indonesia raised benchmark interest rates by 50 basis points to 5.25% in an emergency-style move aimed at defending the rupiah and containing inflation risks.

But for investors, the rate hike may not be enough to restore confidence unless policymakers can convince markets that Indonesia remains committed to transparency, private-sector competitiveness and predictable economic governance.