look news india
Mumbai: For the first time, India has overtaken China to top the MSCI Emerging Markets Investable Markets Index in terms of weightage.
The weightage of Chinese stocks has come down to 21.58 percent while the weightage of Indian stocks has come down to 22.27 percent. However, China is far ahead of India in terms of market cap. China's market cap is $8.14 trillion, 60 percent more than India's market cap of $5.03 trillion. A Morgan Stanley report said that increasing India's weightage in the MSCI Emerging Markets Investable Market Index is likely to increase foreign investment in Indian companies.
The MSCI Emerging Markets Investable Market Index includes large caps as well as mid and small cap stocks.
Given the long-term poor performance of Chinese stocks, MSCI has been reducing the number of Chinese stocks from its indices for the past two years.
The importance of Indian equities in the MSCI indices is rising. Last week, seven Indian stocks were added to the MSCI EM, while 60 Chinese stocks fell again.
An analyst said that this rebalancing is expected to drive the trend in equity markets. While China is facing economic challenges, macroeconomic conditions in India are becoming favourable.
India and China are followed by Taiwan, South Korea and Brazil in terms of weightage in the MSCI Emerging Markets Investable Markets Index.