MSCI November review lifts India weight in emerging markets index
India's representation in a key emerging markets benchmark is increasing after MSCI added four domestic stocks and raised the weightings of 11 others in its November review. The changes are set to push India's weight in the MSCI Emerging Markets Index from 11.5% to 11.7%, implying about $2 billion in additional passive inflows, according to Nuvama Wealth Management.
Highlights
- MSCI's November review adds Adani Green Energy, Coforge, Life Insurance Corporation of India, and Meesho to its Global Standard index, removing PI Industries.
- India's weight in the MSCI Emerging Markets Index will rise from 11.5% to 11.7%, according to Nuvama Wealth Management.
- Analysts estimate the adjustments may trigger about $2 billion in incremental passive inflows to Indian equities following the index changes.
Index changes reshape India exposure
As reported by Reuters, MSCI has added Adani Green Energy, Coforge, Life Insurance Corporation of India and Meesho to its flagship Global Standard index in the latest review. The index provider also removed agrochemicals maker PI Industries.The revisions increase the representation of Indian companies in one of the most closely tracked global equity benchmarks for emerging markets. Because passive funds track MSCI's index composition, the review effectively raises India's weight in the broader MSCI Emerging Markets Index.
Passive inflow outlook for Indian equities
Analysts at Nuvama Wealth Management said in a note that India's weighting in the MSCI EM Index is set to rise from 11.5% to 11.7%. They estimated that the adjustment could translate into incremental passive inflows of about $2 billion.The review highlights continued benchmark support for Indian equities within global emerging market allocations. For market participants, the index changes matter because they can influence fund flows, stock demand and the relative visibility of Indian companies among international investors.
The latest update follows our earlier article on India trade deficit data, as imports outpaced exports in September.
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