Indian equities to receive net $1.5 billion inflow with latest MSCI index rejig: Nuvama

Indian common shares are likely to receive a net inflow of $1.5 billion after MSCI Inc.’s changes. increasing the nation’s representation to a record, according to Nuvama Wealth Management Ltd. Nine stocks, including IndusInd Bank Ltd. and wind. -turbine maker Suzlon Energy Ltd., will be added to MSCI’s benchmark global gauge on November 30.

Post changes, India will have 131 companies in the MSCI Emerging Markets Index, and the weight of the nation will reach an all-time high of 16.3 percent, analyst Abhilash Pagaria wrote in a note.

India’s representation in the EM index has doubled since the height of the pandemic in March 2020, underscoring its appeal as one of the world’s fastest growing economies with the potential for solid earnings growth.

The nation’s weighting in the MSCI Asia Pacific Index – the index provider’s regional benchmark – will surpass China in the next five years, Morgan Stanley equity strategist Jonathan Garner said in a session with clients on Wednesday.

“India’s weights had to go up, it was a natural thing,” said Rakhi Prasad, investment manager at Alder Capital. rise.”

Global funds have plowed more than $12 billion into Indian equities so far in 2023, the highest among emerging Asia. Sentiment has also increased investor demand in the world’s most populous country as economic growth has slowed in China.

China’s MSCI Index has lost about 9 percent so far in 2023, set for a third straight year of losses, dragged down by the country’s slowing economic growth and geopolitical headwinds. In comparison, the MSCI India gauge is set for its fifth annual advance.

China has the highest weighting at 27 percent in MSCI’s EM gauge, followed by India at 16 percent and Taiwan at 15 percent, the data shows.

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Updated: 15 November 2023, 06:52 PM IST

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