BENGALURU, Aug 13 (Reuters) – India’s weight on the MSCI Global Standard index, which tracks emerging market stocks, has risen to another record high, which is likely to attract inflows of about $3 billion into its equity markets.
India has further narrowed the gap with China on the key MSCI index. While China’s weightage on the index will fall to 24.2% from 24.8%, India’s weight will rise to 19.8% from 19.2%, according to Abhilash Pagaria, head of Nuvama Alternative and Quantitative Research.
The changes in the index weights will come into effect on after markets close on Aug. 30. India’s weight could likely rise above 20% at end November.
This will lead to about $2.7 billion-$3 billion inflows into India, according to Nuvama.
HDFC Bank (HDBK.NS), opens new tab, India’s top private lender and the heaviest stock in the benchmark NSE Nifty 50 (.NSEI), opens new tab, will see an increase in its weightage, triggering potential inflows of $1.8 billion, Nuvama said.
“Given the current pace and momentum in domestic equities, India could potentially cross 22% weightage by year-end” on the MSCI index, Pagaria said.
Bharti Airtel (BRTI.NS), opens new tab, Coal India (COAL.NS), opens new tab, Mphasis (MBFL.NS), opens new tab are among the companies that will also see an increase in their weightage on the index, while Maruti Suzuki India (MRTI.NS), opens new tab, LTIMindtree (LTIM.NS), opens new tab, Ambuja Cements (ABUJ.NS), opens new tab, Adani Enterprises (ADEL.NS), opens new tab, Yes Bank (YESB.NS), opens new tab and SRF (SRFL.NS), opens new tab will see a reduction.
Dixon Technologies (DIXO.NS), opens new tab, Vodafone Idea (VODA.NS), opens new tab, Oil India (OILI.NS), opens new tab, Zydus Lifesciences (ZYDU.NS), opens new tab, Rail Vikas Nigam (RAIV.NS), opens new tab, Prestige Estates Project (PREG.NS), opens new tab and Oracle Financial Services (ORCL.NS), opens new tab will be added to MSCI Emerging Markets index while Bandhan Bank (BANH.NS), opens new tab will be excluded.
About 25 stocks will be added to the MSCI India Small-cap index. They will see likely inflows of $3 million-$26 million, according to Nuvama.
(This story has been corrected by Nuvama to say China’s weight will drop ‘to 24.2% from 24.8%’, not ‘to 20.2% from 25%’, in paragraph 2 and chart 1)
