Nifty200 Momentum30: A flip of index switch jolts ₹16K cr across the grid

Once rebalance kicks in, passive money follows preset circuitry

The upcoming rebalancing of the Nifty200 Momentum 30 index is expected to trigger market churn of more than ₹16,000 crore. Nifty Indices, India’s largest index provider, announced on December 11 that 19 current constituents of the quant-based index will be replaced. The changes will take effect at the close on December 30. 

Brian Freitas, a New Zealand-based analyst with Periscope Analytics and an independent insight provider for Smartkarma, estimates the reshuffle could generate round-trip trades totalling ₹16,130 crore ($1.8 billion). He observes that flows into 27 stocks may exceed their one-day average trading volume. 

Stocks exiting the index are projected to see outflows ranging from ₹103 crore to ₹647 crore, while new entrants could attract inflows between ₹159 crore and ₹628 crore. 

The Nifty200 Momentum 30 tracks the top 30 stocks within the Nifty 200 based on a ‘normalised momentum score’, calculated from six- and 12-month price returns adjusted for volatility. 

Freitas observes that the index’s momentum-driven nature could allow new entrants to continue outperforming the deletions over the coming weeks, with passive flows shaping overall market sentiment.