Jakarta stocks finished sharply lower on Thursday as an offer by a top minister to resign raised political concerns at the start of election campaigning.
Dealers said weak regional markets also dampened sentiment, causing the composite index to end 2.52 percent down at 741.2 points.
A weaker rupiah currency, which fell to a seven-month low beyond 8,600 per dollar on Thursday, also affected trading on the Jakarta bourse, they added.
Trading was light, with an estimated turnover of 737.29 billion rupiah ($85.48 million). Decliners trounced winners 125 to 10 while 60 issues were unchanged.
Indonesia's powerful chief security minister said on Thursday he had offered to quit President Megawati Sukarnoputri's cabinet because of a row over his bid to contest elections for the top job later this year.
"I think local factors such as the Yudhoyono issue are significant," Adrian Rusmana, head of research at BNI Securities said.
Indonesia launched campaigning on Thursday for parliamentary elections with two big secular parties and a host of smaller Islamic ones competing for votes against a backdrop of possible attacks by militants.
Indonesia's third largest bank by assets, PT Bank Central Asia Tbk, was the most actively counter, ending down 2.58 percent at 3,775 rupiah.