India’s weight in MSCI’s Global Standard index, which tracks emerging market stocks, has risen to another record high, boosting prospects of more inflows into its equity markets.

With this, India has further narrowed the gap with China on the index.

While China’s weightage in the index will fall to 25 per cent from 25.4 per cent, India’s weight will rise to 19 per cent from 18.2 per cent. The changes, announced on Wednesday, will be effective May 31.

The May review will lead to about $2 billion - $2.5 billion inflows into India, Abhilash Pagaria, head of Nuvama Alternative and Quantitative Research, said.

Consistent flows from domestic institutional investors and steady participation by foreign investors mean that there is potential for India to surpass 20 per cent weightage in the MSCI Global Standard index by the second half of 2024, Pagaria said.

With the May rejig, India’s stock count in the MSCI Global Standard index is at 149, the highest ever for the country.

India’s rising prominence in emerging markets is due to the robust performance of its equities, particularly in the mid-cap segment, amid the relative underperformance by other emerging markets, especially China, analysts have said.

MSCI will add 13 Indian companies, the most among emerging markets, to the Global Standard Index from May end. These include JSW Energy, Canara Bank, and Indus Towers in the large-cap segment, and Mankind Pharma, Bosch, Solar Industries, NHPC, Torrent Power, Thermax, Jindal Stainless and Sundaram Finance in the mid-cap index.

Phoenix Mills and PB Fintech have been upgraded to the mid-cap index from small-cap by MSCI.

Berger Paints will be removed from the MSCI index while Indraprastha Gas and Paytm’s parent One 97 Communications have been downgraded to the small-cap index from the mid-cap index.

Sensex falls

Snapping its three-day winning run, the benchmark Sensex declined 117 points in a volatile trade on Wednesday due to selling in heavyweights such as HDFC Bank, Reliance Industries and TCS.

The 30-share BSE Sensex declined 117.58 points or 0.16 per cent to settle at 72987.03. During the day, it lost 281.95 points or 0.38 per cent to 72822.66.

The broader Nifty dipped 17.30 points or 0.08 per cent to close at 22200.55. The index oscillated between a high of 22297.55 and a low of 22151.75 in day trade.

“The market witnessed a sideways movement throughout the day as the emotions of investors were impacted by the election-led jitters. FIIs continued to remain in the selling mode.

However, domestic investors were largely concentrated on stock-specific picks,” said Vinod Nair, head of research, Geojit Financial Services.