The stocks added to the MSCI India index include Bajaj Hindustan Ltd, Indiabulls Financial Services Ltd, Jaiprakash Associates Ltd, Reliance Capital Ltd and Siemens India Ltd. Stocks as a part of the India index now go up to 68. The changes to the indices will be effective from June 1.
After this recast, India's weightage in MSCI Emerging Markets Asia index will go up from 11.93 per cent to 12.09 per cent and in MSCI All Country World Index, up from .47 per cent to .49 per cent. The MSCI indices are used by funds to benchmark their investments.
Analysts said they expect foreign funds flow into the domestic equity markets to gather more steam due to increase in the weightage of India in the MSCI index.
However, Andrew Holland, executive vice president -- research, Merrill Lynch, says, "There won't be any impact on the Indian markets as the increase in weightage is marginal."
An analyst with a foreign broking house said, "Though the inclusion of Indian stocks in the MSCI index may not trigger an immediate run up in the prices of respective stocks, inclusion in the international index is regarded positive over a long term."
The market response to the change was lukewarm. Bajaj Hindusthan was up by 1.5 per cent on the BSE to Rs 535.95, Indiabulls Financial Services was up by .75 per cent at Rs 330.70, Jaiprakash Associates lost .82 per cent to Rs 540.10, Reliance Capital was also down by 1.02 per cent to Rs 625.05, Siemens India was up by 1.44 per cent to Rs 5983.75. While Castrol India, which is dropped from the index, lost 1.62 per cent to Rs 227.95.
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