Indian stocks’ weightage in its Emerging Markets index is likely to be reduced by 0.17 percentage points to 13.25 per cent after the rebalancing of the index by MSCI Inc, which made additions and deletions to the stocks in its global standard indexes, India domestic standard index and India domestic small-cap index. This may result in sell-off of shares worth about $600 million
.
Analysts said the weightage for Reliance Industries has increased post rejig, which saw addition of four scrips—Adani Power, Jindal Steel and Power, Tata Elxsi and AU Small Finance Bank— and exclusion of HDFC Asset Management Limited from its MSCI Global Index. While the announcement was made earlier last month, the changes took effect on May 31.
Adani Group stocks lose
According to analysts, some of the Adani Group stocks saw reduction in weightage following the admission of new stocks. Even as Adani Power was included in the MSCI global index, the stock tumbled 5 per cent on heavy selling on Wednesday. This was true with all Adani Group stocks, which lost in the range of 0.3 per cent to 4.5 per cent amidst overall weakness in the market.
The benchmark Sensex lost 185 points to end at 55,381 points on Wednesday. "This is a routine practice of rebalancing at MSCI index, so nothing surprising for the Street. Also, the Adani stocks had rallied in recent times, which awaited a reason for a correction. So, there is nothing much to panic about," said Kishor Ostwal, a market expert in Mumbai.
Notably, in the MSCI global small cap index, 14 stocks were removed and 44 were added.
For India-specific MSCI India Domestic index, four scrips—HDFC Asset Management, Indraprastha Gas, MRF and Shriram Transport Financial - were removed, while those added to the index included Bank of Baroda, Cholamandalam Investment and Finance Company and Jindal Steel and Power.
For the MSCI India domestic small cap index, 10 scrips were deleted and 50 new scrips were added to the index as part of the rejig. While stocks such as Apollo Tricoat Tubes, Aptus Value Housing Fin, Bharat Dynamics, Equitas Small Finance, Greaves Cotton, Indian Bank, Hindustan Copper, JP Ventures, Indraprastha Gas, MRF, PB Fintech, Raymond and Varroc were included in the index, Adani Power, Bajaj Consumer, Future Retail and Spandhana Sphoorty got excluded.