DLF, Sterlite move into MSCI Asia Index

DLF Ltd and Sterlite Industries were the key inclusions in the Morgan Stanley Emerging Markets Asia Index in the latest revisions of various indices announced by MSCI Barra, a global provider of stock indices.

Companies that are included in the indices benefit from buying interest by global funds, which track the index. DLF ended higher by 1.4 per cent to Rs 927.90 and Sterlite Industries gained 0.07 per cent during the morning trade.

MSCI Barra also added eight new stocks in the MSCI India Index while removing seven. The additions are Cairn India, DLF, GMR Infrastructure, HCL Technologies, NTPC, RNRL, Sterlite Industries and United Spirits. The deletions are Ashok Leyland, Bharat Forge, Asian Paints, GSK Pharma, HPCL, Nestle India and Videocon Industries.

The changes are part of the bi-annual review and will be made as of the close of November 30. India's weightage in MSCI Emerging Market Asia index has increased by 5 basis points to 7.16 per cent, while the same in the MSCI All-Country index is up, from 0.76 per cent to 0.79 per cent.

"Weightage in the EM index indicates that they are bullish on a particular country and hence increase exposure to it since the fundamentals of the country are sound," said Anil Advani, head of research, SBI Cap Securities. Foreign funds that track these indices will buy stocks that have been included in the index, he added.

As a result of these additions, most stocks soared in the morning trade before profit booking began in late afternoon trades with GMR Infrastructure (up 3.01 per cent), DLF (up 1.27 per cent) and Sterlite Industries (up 0.07 per cent).

MSCI Barra also made changes to its Provisional Global Standard Indices. Four new stocks were added to this index while seven were deleted.

DLF, GMR Infrastructure, RNRL and Sterlite Industries are the additions. The deletions were Ashok Leyland, Asian Paints, Bharat Forge, GSK Pharma, HPCL, Nestle India and Videocon Industries.

Provisional indices assist investors in understanding the changes that would occur if the transition to the MSCI Global Investable Market Indices Methodology would occur immediately. They also provide increased flexibility to current investors who wish to transition on their own schedule.

The MSCI Global Standard and MSCI Small Cap Indices will transition to the MSCI Global Investable Market Indices Methodology in two phases.