India Beats China: India is soon going to beat China in terms of weightage in the world’s leading Emerging Markets Index. If this happens, there can be a huge increase in foreign investment in the Indian stock market, which is expected to lead to a strong boom in the stock market. India is on the verge of leaving the Dragon behind in the MSCI EM Investable Market Index. With this, India is on its way to becoming the most popular emerging market among investors.
India’s weightage increased in the Emerging Market Index
According to a Reuters report, Morgan Stanley said that India’s weightage in the MSCI EM Investable Market Index has come very close to China. After the changes made in the index in August 2024, India’s weightage in the MSCI Emerging Market Index has increased to 19.8 percent, which is very close to China’s 24.2 percent and may soon overtake the Dragon. In December 2020, India’s weightage in the MSCI Emerging Market Index used to be only 9.2 percent while China’s weightage was 39.1 percent then. India’s weightage has increased during this period while China’s weightage has decreased. Morgan Stanley analysts led by Ridham Desai wrote in their note, an increase in weightage means more foreign investment.
FPI investment increased
The MSCI EM Investable Market Index includes large, mid and small-caps from 24 emerging markets in the world. In the year 2024, foreign portfolio investors (FPIs) have bought shares worth $ 6.33 billion in Indian stock markets and have been net buyers since June. Due to the formation of the government under the leadership of Prime Minister Narendra Modi for the third consecutive time, this investment has increased due to the continuation of the old policy and the possibility of reduction in global interest rates.
Indian markets will continue to rise
Due to heavy investment by domestic institutional investors, mutual funds and retail investors in Indian markets, NSE’s benchmark index Nifty 50 has reached a record high and this year the index has seen a jump of 16 percent, which is the highest compared to the benchmark index of any stock market in the world including China. Ridham Desai said, the current bull market i.e. the boom in the market has covered only half the distance. This boom is expected to continue in India and India still has a long way to go in the MSCI Emerging Market Index. India is Morgan Stanley’s top pick in emerging markets, while in the entire Asia-Pacific region, it is the second most preferred destination after Japan.
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