India’s ranking on the MSCI (Morgan Stanley Capital International) Emerging Markets (EM) Index slipped following last month’s underperformance amid a rout in Adani Group shares, a report by Business Standard stated.
With a weighting of 12.97 percent, India is now ranked third after China and Taiwan with weights of 33.49 percent and 14.42 percent, respectively, said the report citing the factsheet by the global index compiler.
As per the report, India had a weighting of 14.44 percent at the end of December 2022, taking the second place for the first time. The ascent came after outperforming the EM pack in 2022.
The MSCI India fell 8 percent in 2022, even as the MSCI EM declined 20 percent — both in US dollar terms, it said.
However, in 2023, there has been a reversal of fortune, with MSCI India down 3 percent in January and MSCI EM up 8 percent, said the report, adding that within EMs, the MSCI Taiwan Index has been a sharp outperformer, surging nearly 13 percent last month.
“MSCI Taiwan went up sharply in January, driven by a 16.4 percent rally in Taiwan Semiconductor Manufacturing Company (TSMC). TSMC is around 45 percent of the MSCI Taiwan Index weight. On the other hand, MSCI India was down about 4 percent in January, of which 1.7 percent was due to a drop in Adani Group stocks,” Brian Freitas, a New Zealand-based analyst with Periscope Analytics who has researched Adani Group, was quoted as saying in the report.
During the four trading sessions between January 24 and January 31, over ₹5.6 lakh crore, or 29 percent, got shaved off from Adani Group after US short-seller Hindenburg Research levelled serious allegations of fraud against the conglomerate, noted BS.
Shares of the group have seen further erosion in market value so far this month, which could put more pressure on India’s weighting in the coveted MSCI EM Index, it further pointed out.
Abhilash Pagaria, head-alternative and quantitative Research, Nuvama Institutional Equities, said the weighting could now consolidate around current levels, as per the report.