MSCI INDEX (Syllabus: GS Paper 3 – Eonomy)

News-CRUX-10     14th February 2024        
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Context: The gap in weightage between Indian and Chinese equities on the MSCI index is narrowing with several global investors preferring shares on Dalal Street over those in Shanghai.

oSince January 2021, India's weight in the MSCI Standard Index has more than doubled from 8.9% to 18.2%, whereas China's weight has declined from 40.1% to 25.4% during the same period

MSCI Index

  • About: The MSCI World is a stock market index of 1,643 world’ stocks. 
  • It is maintained by MSCI Inc, formerly Morgan Stanley Capital International, and is used as a common benchmark for ‘world’ or ‘global’ stock funds.

oThe index includes a collection of stocks of all the developed markets in the world, as defined by MSCI. 

oThe index includes securities from 23 countries but excludes stocks from emerging and frontier economies making it less worldwide than the name suggests. 

oA related index, the MSCI All Country World Index (ACWI), incorporated both developed and emerging countries. 

oMSCI also produces a Frontier Markets index, including another 31 markets.

  • MSCI Index India: As per the official definition, the MSCI Index India is used to evaluate the performance of large and mid-cap segments of the Indian market. 

oMSCI Global Investable Indexes (GIMI) Methodology is used for MSCI Index India.

oAround 85 percent of the Indian equity universe is covered by the MSCI Index India.

oThere are four constituents: Largest, Smallest, Average and Median.

  • Significance: It is considered to be one of the important indices that focus on  different geographic areas and stock types such as small-caps, mid-caps, and large-caps.

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