Adani rout drags India’s weighting in EM index as Taiwan gains

People walk past a screen displaying news featuring on Adani Group inside the BSE building in Mumbai, India, on Thursday, Feb. 2, 2023. Adani’s businesses have lost $107 billion in a week, one of the biggest wipeouts in India’s history, after an explosive report by short-seller Hindenburg Research forced him to pull a stock sale at the 11th hour and led some lenders to reject his securities as collateral for client trades. Photographer: Dhiraj Singh/Bloomberg

India’s weighting in MSCI’s emerging-market benchmark has dropped after the brutal selloff in Adani Group’s stocks, giving away its second spot to Taiwan after a rally in the latter’s market.

As of the end of January, Taiwan’s weighting in the MSCI Emerging Markets Index rose to 14.2%, behind leader China’s 31.2%, while India’s fell to the third spot with 13%, according to Bloomberg-compiled data. India captured the second spot from Taiwan in August.

The role reversal between India and Taiwan highlights the contagion of a stock meltdown that has wiped out $112 billion of market value in Gautam Adani’s indebted conglomerate since US-based Hindenburg Research made fraud allegations against the billionaire’s business empire. While the MSCI India Index has lost 4.2% this year, its Taiwan counterpart has surged about 11% as part of a broader North Asian rally induced by China’s reopening optimism.