MSCI February Review Impacts Indian Market with Stock Index Updates

In the February revision of its indices, MSCI Inc., a prominent index provider, has modified its various indexes affecting Indian stocks. The MSCI Emerging Markets Index, which plays a critical role for investors tracking emerging economies, now includes four new Indian stocks.

Inclusions in MSCI Emerging Markets Index

Following the review, four Indian entities have seen a rise in their prospects. Punjab National Bank and Union Bank Of India have been classified under the large-cap category while Bharat Heavy Electricals Ltd. (BHEL) and NMDC have found their positions in the mid-cap index. Moreover, GMR Airports Infra has ascended from small-cap to join the mid-cap ranks as of the market closure on February 29th.

Changes in MSCI Domestic Indexes

The MSCI Domestic Index, which reflects the performance within India, also welcomed new members. Tata Motors A and Macrotech Developers have joined the large-cap index. Punjab National Bank and Canara Bank are now part of the mid-cap category. There have been several promotions from small-cap to mid-cap, including BHEL, Persistent Systems, MRF, Suzlon Energy, and Cummins India Kirloskar, with Embassy Office Parks REIT being a new mid-cap addition.

Adjustments to MSCI Small and Domestic Cap Indices

The MSCI Emerging Markets Small Cap Index bid farewell to Prestige Estates Projects and Rail Vikas Nigam Ltd. However, it welcomed the Indian Renewable Energy Development Agency. Meanwhile, GMR Airports Infra moved up to the mid-cap category. The MSCI India Domestic Index underwent a significant expansion as ten stocks were added, while none were removed, resulting in an overall one-way index turnover of 2.94%.

MSCI India Domestic Large Cap Index Updates

Within the domestic large-cap sphere, Trent, Tata Consumer Products, Power Finance, REC, Tata Power, Macrotech Developers, and Tata Motors were ushered into the index without any stocks exiting.

MSCI India Domestic Small Cap Index Developments

The domestic small-cap index saw an influx of new entrants like IREDA, Vedant Fashions, and Honasa Consumer, amongst others. In contrast, companies such as Persistent Systems, Suzlon Energy, and Cummins India Kirloskar were part of the top ten exits from the gauge. The reshuffle could usher in passive inflows of foreign funds to India, estimated between $800 million to $1 billion, which reflects the nation's sizeable 17.8% stake in the MSCI Emerging Market Index—a figure expected to increase to 18.5% according to Nuvama Alternative & Quantitative Research.

India, MSCI, Stocks