Mumbai, Sep 6 (IANS) India has overtaken China to top the MSCI Investable Markets Index for emerging markets. The country with the world’s fastest growing economy may also overtake China in the overall index.
MSCI is an American financial company that releases this index. The emerging markets category includes 24 countries and the index is prepared based on data from 3,355 large, medium and small companies. These companies cover approximately 99 percent of the total free float-adjusted market capitalization in all 24 countries.
Global brokerage firm Morgan Stanley said in a note that the increase in index weighting could be a sign of over-enthusiasm or “due to fundamental factors such as improving free-float and rising relative earnings of Indian companies”.
“In the case of India, the fundamentals certainly apply and to that extent, India’s new status in the emerging market space is not worrisome,” the brokerage said, adding that India remains its top preference in the emerging market space and second choice in the Asia-Pacific region.
According to the note, there are several potential triggers for the market to correct, but they are not enough to put the brakes on the rally in Indian equities. There may be some more distance to cover before India’s performance in the index reaches its peak.
Market analysts said that the performance of the Indian economy continues to be good and the macroeconomic situation is improving. Foreign direct investment (FDI) has increased by 47 percent in the first quarter of April-June in FY 2025. On the other hand, with the continuous decline in the prices of Brent crude, there are now signs of it falling below $ 73 per barrel.
There is financial stability and the growth momentum in the economy remains strong. Foreign portfolio investors (FPIs) have invested more than Rs 1 lakh crore in the Indian debt market so far this year, thanks to the country’s inclusion in J.P. Morgan’s emerging markets government bond index in June this year.
–IANS
RK/AKJ
