The adjustment to the MSCI Global Standard Index post its recent rebalancing is due to take place on November 30. Earlier this month, Morgan Stanley Capital International announced the inclusion of nine Indian stocks, including IndusInd Bank, Suzlon Energy, Persistent Systems and Paytm parent One97 Communications among others to its MSCI Global Standard Index.
Other stocks to be added to the index were APL Apollo, Polycab, Macrotech Developers, Tata Motors and Tata Communications while exclusions from the list stood at zero.
Moreover, the inclusion of these nine stocks is expected to draw passive inflows of close to $1.5 billion as per calculations from Nuvama Alternative & Quantitative Research.
"Post the adjustments coming into effect, India's stock count will rise to 131, and our weights are set to move close to 16.3 percent. 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," Abhilash Pagaria, Head, Nuvama Alternative & Quantitative Research stated in a note.
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As per its impact on the stock performance of the scrips added to the list, Pagaria believes most of the price impact to be factored in. Instead of a strong price impact, Pagaria anticipates the adjustments to the Global Standard index to have more of a volume impact today on stocks added to the list.
Meanwhile, adjustments to the MSCI's Smallcap index to include the 42 Indian stocks added to the list will also come into effect from market close today. The slew of inclusions to the smallcap index could also attract cumulative flows of up to $142 million in these counters, as calculated by Nuvama Alternative & Quantitative Research.
Also Read | Slew of inclusions to MSCI Smallcap index to attract inflows worth $142 million
Some major names to be added to the list include SJVN, Gokaldas Exports, PTC India, NLC India. SJVN was expected to witness maximum inflows of around $9 million, followed by Gokaldas Exports at $6 million.
The run-up to the adjustment of MSCI's latest rejig coming into effect saw increased passive flows from hedge funds and investment firms tracking the index. The uptick in foreign inflows also turned FIIs into buyers in November, albeit for a few days, as they net bought Indian equities worth around $640 million in the month so far.
The increased flows from FIIs also kept the market sentiment upbeat, which also aided the Nifty 50's ascent to the psychological mark of 20,000 after 47 trading sessions on November 29.
Also Read | MSCI index rejig adds Paytm, IndusInd Bank, Persistent Systems, excludes none from India
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