MSCI reshuffle a mixed bag for stocks; FII inflows may rise India could see more foreign institutional investor (FII) money flooding into equity markets with the country having regained its previous high of 7.25% in terms of weight in the MSCI Emerging Market index after a gap of three years. Also, Indias weight in the MSCI BRIC index rose to a record 17.35% on October 31. To be sure, the impact of MSCIs semi-annual reshuffle will be mixed on individual stocks, with HDFC BankBSE -1.51 % for instance being adversely affected. FIIs have funneled about Rs 86,200 crore into equities so far this year against Rs 1.13 lakh crore all of last year. The MSCI India Index has risen 26% so far this year, while the MSCI Emerging Market index has declined 1.13%. The Reserve Bank of India has banned further stake purchases in HDFC Bank by FIIs. The Foreign Investment Promotion Board or FIPB, the nodal agency for clearing foreign direct investment (FDI), declined to clear the banks proposal to hike the foreign portfolio investment limit. MSCI added Motherson Sumi SystemsBSE 0.47 % and Zee EntertainmentBSE 5.00 % to its Global Standard Index, leading to a pop in their stocks. Zee Entertainment hit a 52-week high of Rs 374 on Friday, before ending at Rs 372.45, 5% up. Motherson Sumi gained as much as 3.3% before ending flat at Rs 428.20. Jaiprakash AssociatesBSE 0.46 % ended flat at Rs 33. Many FIIs benchmark their Indian portfolios to the MSCI Index and hence need to move their money around when there is a change in weight.
Posted on: Sat, 08 Nov 2014 19:14:12 +0000
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