MSCI adds four Indian stocks to its flagship Global Standard index

what happened

In its November review, index provider MSCI added four Indian companies to the flagship Global Standard index: Adani Green Energy, Coforge, Life Insurance Corporation of India and Meesho. The agrochemicals maker PI Industries was removed, while the weights of eleven other stocks were increased. According to analysts at Nuvama Wealth Management, cited by Reuters, India's weight in the MSCI EM index will climb from 11.5% to 11.7%, which could bring in roughly $2 billion of passive inflows.

why it matters

For the Indian market, this means added demand from passive funds that track the index. The inflow could support the shares of the newly included companies and Indian equities more broadly, while the removal of PI Industries typically weighs on its price. For emerging market investors, the higher share of India also changes the makeup of funds that follow the EM index.

market impact

Indian stocks: about $2 billion of passive fund inflows supports the market

• ▲Indian stocks pressure up — expected passive inflows of about $2 billion from funds that track the index
• ▼PI Industries pressure down — removal from the Global Standard index triggers selling by passive funds

instruments