Global equity indices compiler MSCI has increased India's weight on its Emerging Market index, while it has slightly reduced weights of some bluechips in its India Index.
The weight of housing finance giant HDFC, however, has been hiked on the MSCI India Index. But the weights of some heavyweights Reliance Industries Ltd (RIL), Infosys and TCS has been reduced by 10 basis points each.
The increase in HDFC's weigthage on India index is much more significant - up from 6.21% to 7.46%.
The MSCI indices are keenly watched by investors across the world to track trends in stock markets in India and elsewhere. The proposed changes would be effective from August 31, 2012.
In its latest review of various indices, MSCI has increased India's weightage in its Emerging Market Index to 6.40%, from 6.33% previously.
Besides, stocks like Bombay Rayon Fashions, Mindtree, Nava Bharat Ventures and Time Technoplast would be dropped from the MSCI India Index of the global index services provider.
In an analysis of the changes announced by MSCI, Morgan Stanley India said that the development would positively impact HDFC shares by way of an estimated inflows of $126 million, which is approximately 4.2 times its daily traded volume.
Other stocks that could be positively impacted, although by a small amount, include IDFC, Zee Entertainment and Sun Pharma, while stocks to get negatively impacted are Hindustan Unilever (about $10 million outflow), RIL ($4 million) and Infosys ($3.8 million).
In a lacklustre market this morning, HDFC shares were trading 1.6% up at Rs 713.90 at the BSE, while HUL, Infosys and TCS were trading with modest losses. However, RIL was up nearly 1.5% at Rs 810.75.
