India’s weight in MSCI’s Global Standard index, which tracks emerging market stocks, has reached another record high, boosting the likelihood of more inflows into its equity markets. This change narrows the gap between India and China on the index. China’s weightage will decrease from 25.4% to 25%, while India’s weight will increase from 18.2% to 19%. These changes announced on Wednesday will take effect on May 31.
Abhilash Pagaria, analyst at Nuvama Alternative and Quantitative Research told the news agency Reuters that the review will lead to about $2 billion inflows into India.
Pagaria also said that the consistent flows from domestic institutional investors and steady participation by foreign investors mean that there is potential for India to surpass 20 percent weightage in the index by the second half of 2024.
With the May rejig, India’s stock count in the MSCI Global Standard index is at 149, the highest ever for the country.
Reuters quoted analysts as saying that New Delhi’s rising stature in emerging markets is because of the robust performance of its equities, particularly in the mid-cap segment, amid the relative underperformance by other emerging markets, especially China.
MSCI will add 13 Indian companies, the most among emerging markets, to the Global Standard Index from May end. These include JSW Energy, Canara Bank, Indus Towers in the large-cap segment, and Mankind Pharma, Bosch, Solar Industries, NHPC, Torrent Power, Thermax, Jindal Stainless and Sundaram Finance in the mid-cap index.
Phoenix Mills and PB Fintech have been upgraded to the mid-cap index from small-cap by MSCI. Berger Paints will be removed from the MSCI index while Indraprastha Gas and Paytm’s parent One 97 Communications have been downgraded to the small-cap index from the mid-cap index.
Housing Urban Development Corp and Waaree Renewable Technologies have been added to the small-cap index. Separately, 29 Indian stocks have been added to the MSCI Domestic index while 15 have been moved to other categories or removed.
With inputs from agencies.
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India’s weight in key emerging market equity index hits record high, gap with China narrows
