Markets may take the MSCI EM rejig in their stride, say analysts

Reports peg the outflow from Indian shores at around $700 million as a result of the MSCI Emerging Market index rejig.

Markets are likely to take the MSCI Emerging Market (EM) index rejig, which involves increasing the weight of China A shares, in their stride if corporate results remain healthy and the outcome of the ongoing general elections does not spring a surprise, say analysts.

According to a release by MSCI, as the first step, 26 China A shares (18 of which are ChiNext – a NASDAQ-style board of the Shenzhen Stock Exchange – stocks) will be added to the MSCI China Index and the inclusion factor for 238 existing constituents will be increased from 0.05 to 0.10. China A shares