© Reuters. FILE PHOTO: The MSCI emblem is seen on this June 20, 2017 illustration picture. REUTERS/Thomas White/Illustration/File Photo
By Bharath Rajeswaran
BENGALURU (Reuters) -India has narrowed the hole with China in MSCI’s Global Standard index, which tracks rising market shares for buyers, after the newest revision.
Index supplier MSCI raised India’s weightage within the index to an all-time excessive of 18.2% on Tuesday, which might result in inflows of about $1.2 billion, analysts stated.
In comparability, China’s weight within the index fell to 25.4% after the February revision, from 26.6% a yr in the past.
The convergence of weights between Indian and Chinese shares has intensified since August 2020, when China’s weightage was 5 occasions that of India’s.
MSCI’s revisions will come into impact after market shut on Feb. 29. Indian shares had a 17.9% weight on the index forward of the February overview.
The achieve for India could be attributed to a sustained rally in equities and relative underperformance of different rising markets, particularly China, Nuvama Alternative & Quantitative Research stated in a notice on Tuesday.
India might surpass a 20% weight on the MSCI index by early 2024, on constant flows from home institutional buyers and regular overseas portfolio investor participation, Nuvama stated.
MSCI added 5 Indian shares to its Global Standard index and didn’t transfer any out. In distinction, the index supplier eliminated 66 Chinese shares whereas including 5.
India’s state-owned lenders Punjab National Bank and Union Bank of India have been added to the large-cap class, whereas Bharat Heavy Electricals and NMDC have been included within the mid-cap class. GMR Airports Infrastructure was moved to the mid-cap class from small-caps.
India might witness as much as $1.2 billion of passive overseas flows after the February overview, Nuvama stated.
About 27 small-cap shares have been added to the MSCI Domestic index, whereas six have been both moved to different classes or eliminated.
Tata Motors (NYSE:) and Macrotech Developers have been added to the home index underneath the large-cap class whereas Punjab National Bank, Canara Bank and Embassy Office Park REIT to the mid-caps.
Bharat Heavy Electricals, Persistent Systems, MRF, Suzlon Energy and Cummins (NYSE:) India have been moved to the mid-cap index from small-caps.