The sharp jump in Indian stocks this quarter has seen its weighting in the MSCI Emerging Markets Index, leaving only China behind.
With 108 members, India’s weight is 14.483% as of the end of August, according to data compiled by Bloomberg. This is higher than 14.480% for Taiwan, with 84 companies in the MSCI EM gauge, including the most weighted Taiwan Semiconductor Manufacturing Company. China continued to dominate with almost a third of the index weighting.
India’s S&P BSE Sensex Data compiled by Bloomberg show it jumped 11% in the quarter, the world’s best performing among national benchmarks in countries with a stock market value of at least $1 trillion.
Rakhi Prasad, an investment manager at Elder Capital, said, “The economic impact of China’s lockdown and zero-Covid policy is now being seen, while India continues to strengthen month-on-month. Emerging markets may weigh more in India. could.” But how much it goes from here will depend on the performance of its economy.
Driven by a pandemic-fueled retail investment boom, Indian stocks outperformed the world between early 2020 and October 2021. Foreign investors pulled a record $33 billion out of local stocks in nine months due to growing concerns about aggressive rate hikes by the Federal Reserve. through June.
Foreign funds have poured in $7.6 billion in the quarter and supercharged the market. The Sensex is now less than 5 per cent away from its October record level.
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