india vs china
India’s dominance in the world is continuously increasing. At the same time, China is continuously rolling down. Now Morgan Stanley has announced that India has overtaken China in terms of its weighted value in the MSCI Emerging Markets Investable Market Index (MSCI EM IMI). India now has a weightage of 22.27 percent, which is more than China’s 21.58 percent. MSCI IMI includes 3,355 stocks, which include large, medium and small cap companies. This index covers stocks from 24 countries with emerging markets and aims to cover approximately 85 percent (free float adjusted) market capitalization available to investors in each country.
Such a huge investment will come in India
While the main MSCI EM index (standard index) comprises large and mid-cap companies, the IMI is more comprehensive with large, mid and small-cap stocks. India’s higher weighting in the MSCI IMI compared to China is due to the higher weighting of small-caps. According to analyst estimates, this change in the MSCI EM IMI may see inflows of about US$4-4.5 billion in Indian equities. This change is due to the strong fundamentals of the Indian economy and the stellar performance of corporates.
Good signs for Indian economy
Moreover, the Indian equity market is witnessing a broad-based gain, which is visible in large-cap as well as mid-cap and small-cap indices. A 47 per cent increase in foreign direct investment (FDI) by early 2024, a decline in crude oil prices and substantial foreign portfolio investment (FPI) inflows into Indian debt markets are among the key factors contributing to this positive trend. To maintain its pace of investment required for economic growth and development, India needs capital from both domestic and foreign sources. In this context, the increase in India’s weighting in global EM indices has positive significance.
Input: IANS
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