Indonesia's stocks and currency slid toward new bearish milestones as rising Middle East conflict dragged on regional assets, compounding concerns over the country's investability and policy direction.

The conflict's escalation has intensified pressure on emerging markets, with Indonesia particularly vulnerable due to its heavy reliance on energy imports and significant foreign debt. Regional asset managers are increasingly cautious, pulling back from Southeast Asia as geopolitical risks rise, which could delay planned infrastructure investments and corporate expansions.

Investors are now questioning Jakarta's ability to maintain stable economic policies amid global uncertainty, with the rupiah's weakness reflecting broader fears about capital flight and reduced foreign direct investment. This development signals potential headwinds for Indonesia's growth trajectory and corporate earnings in the coming quarters.