Following a mid-year review of its indices, MSCI included eight companies in its India index. The additions, which will be effective after market close on May 29, includes Eicher Motors, Bharat Forge, Marico, Lupin, Bharti Infratel, UPL, Container Corporation of India and Shree Cement.
The announcement was followed by good buying interest in these stocks, sending Container Corp Of India, Eicher Motors and UPL to their record highs. Among the eight stocks Shree Cement rallied the most with a gain of 10.07%, while Marico climbed 7.25%. Eicher Motors and Container Corp rose over 5% each. The combined trading volume of Shree Cement saw nearly nine times more than its 30-day average volume of 22,000 shares, adding another R3,545 to its market value, which now stands at R38,745 crore. Marico and Container Corp also saw over six times of their 30-day average volume. The market cap of Eicher Motors and Container Corp rose by R2,553 crore and R1,804 crore respectively.
The surge in these stocks is based on expectations that their inclusion in MSCI index – a benchmark tracked may many global mutual funds – may lead to higher buying interest amongst these investors in order to mirror the index in their portfolio. Earlier in March UK-based FTSE also had added Eicher Motors and Shree Cement to its large-cap index.
Reliance Infrastructure will be excluded from the index. The stock however closed with 5.11% gain.
Lupin was also included in the index but the stock reacted to a below expectations March quarter earnings as it lost 3.35%.