MSCI announced on Wednesday the changes to the indices, and these adjustments will happen on November 30.
After the rebalance, the number of domestic stocks on the Standard Index will rise to 131, and India’s weight on it could rise to 16.3%, up from the current 15.9%.
“India’s representation in the EM index will reach an all-time high, marking a significant increase over the past three years, almost doubling its weight,” said Abhilash Pagaria, head, Nuvama Alternative & Quantitative.
MSCI indices are widely tracked globally, with several passive funds such as exchange traded funds (ETFs) replicating their portfolios according to the stock weightages of its indices. These funds must buy or sell the stocks if the stocks’ weight in the index is increased or reduced.
Zomato, Hindustan Aeronautics, Jio Financial Services, Vedanta, PFC, REC and Colgate Palmolive are the other stocks whose weightage will go up on MSCI’s Standard Index. The weights of Reliance Industries, ICICI Bank, Infosys, HDFC Bank and Tata Consultancy Services will be reduced.
MSCI has added 42 stocks including SJVN, Gokaldas Exports, NLC India, PTC India, Hindustan Construction Company and Electrosteel Castings among others in its Smallcap Index.The index provider has excluded 19 stocks from the Smallcap Index. While Suzlon, Persistent and APL Apollo have been shifted to the Standard Index, Jindal Stainless, Solar Industries, Dalmia Bharat, Oberoi Realty, BHEL, Vodafone Idea and Linde India, among others, have been excluded.
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