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MSCI includes 5 Indian stocks to key index; Nuvama sees $2.5 bln inflows

MSCI added 5 Indian business to its International Requirement Index late on Wednesday, a move that brokerage Nuvama stated would raise the country's weightage on the index to 20%, additional narrowing the gap with China.

MSCI said there would be 156 Indian stocks in the index, but that is only one-fourth of China's 598, signalling scope for further addition of Indian stocks on the index.

The changes will happen after the markets close on Nov. 25, MSCI stated.

The inclusion of the stocks will lift India's weightage in the index to a record 19.8% from 19.3% earlier, narrowing the space with China, which has slipped to 26.8% from 27%, Nuvama Alternative and Quantitative Research approximated.

It will likewise likely draw in $2.5 billion in passive inflows into India's equity markets, Nuvama stated.

China has the highest weightage in the MSCI Global Standard index, while India has remained in second place given that completion of 2021.

Air conditioning system maker Voltas, real estate developer Oberoi Realty, stock market operator BSE, Kalyan Jewellers, and drug maker Alkem Laboratories are the latest additions to the index.

Indian markets saw inflows of about $3 billion into equities after the previous MSCI rebalancing in August when seven stocks were included.

We stay extremely bullish on India, particularly with active participation from mutual funds and high net worth individuals (HNIs)/ retail investors, and anticipate much more inclusions in the emerging markets index, stated Abhilash Pagaria, head of Nuvama research.

7 existing stocks, consisting of leading private lender HDFC Bank and Tata Power, saw a boost in their weightage.

HDFC Bank is now the highest-weighted Indian stock in the MSCI indices at 7.08%, surpassing Reliance Industries' 6.08%.

No Indian business have actually been gotten rid of from the MSCI Global Requirement Index so far in November.

Additionally, around 13 companies, consisting of Eureka Forbes , Indegene, and PC Jeweller, were added to the MSCI Small Cap Index, bringing the total number of small-cap stocks to 525.

(source: Reuters)