India's stock trading value surges to record as MSCI changes spur deals

Rise was driven largely by portfolio adjustments linked to changes in MSCI, prompting passive funds that track the benchmarks to buy and sell shares to align their holdings with the revised weightings

By Ashutosh Joshi

  Trading value in India’s cash equities surged to an all-time high on Friday, as MSCI Inc.’s index changes triggered a flurry of bulk deals by global passive funds.

 

The combined turnover on India’s two key bourses surged past ₹3 trillion ($31.6 billion), surpassing its past peak hit following the national elections’ outcome in June 2024, according to data compiled by Bloomberg. In dollar terms, Friday’s trading value is still short of the two-year-ago level.  

 

The rise was driven largely by portfolio adjustments linked to changes in MSCI indexes, prompting passive funds that track the benchmarks to buy and sell shares to align their holdings with the revised weightings. The changes were estimated to result in as much as $1 billion in outflows from foreign passive funds, according to Nuvama Wealth Management. 

 

 

The share of traded stocks taken for delivery rose to 48 per cent, the highest since the end of March. Local equities slumped in the last hour of trading on Friday as MSCI changes came into effect, closing 1.5 per cent lower. Shares edged higher in early trading Monday, tracking gains in Asian peers.