NEW DELHI: India has overtaken China in the MSCI EM Investable Market Index (IMI) on September 4 to become the largest weight, and is nearing the threshold to surpass China as the top weight in the broader MSCI Emerging Markets index as well.
The weight of India in MSCI EM IMI stood at 22.27% compared to 21.58% of China. MSCI IMI consists of 3,355 stocks and includes large, mid and small cap companies. It captures stocks across 24 Emerging Markets countries and targets coverage of nearly 85% of the free float-adjusted market capitalisation in each country.
While main MSCI EM index covers large and midcap space, the IMI includes large, mid, and small-cap stocks. India’s heavier weight vis-a-vis China in MSCI IMI stems from greater small-cap weighting in its basket. The rebalancing reflects broader market trends.
While Chinese markets have struggled due to economic headwinds, Indian markets have benefitted from favourable macroeconomic conditions.In recent past, India posted a much better market performance, driven by macroeconomic fundamentals as well as robust performance by corporates.