Several Indian stocks are set to see heightened trading activity on Monday as the MSCI rebalancing changes announced on August 13 are scheduled to be implemented on August 31, with the revised weights becoming effective on September 1 (Tuesday). The final 30 minutes of trading on Monday are expected to be particularly important as market participants adjust their positions ahead of the changes.
According to a report by Nuvama Alternative and Quantitative Research, the rebalancing includes additions and exclusions from the MSCI index, along with changes in the weights of several stocks.
Stocks added to MSCI
Laurus Labs, Lenskart, Adani Energy Solutions and Groww are set to be included in the index, which is expected to result in inflows into the four stocks.
Laurus Labs is expected to see inflows of $598 million, while Lenskart could attract $352 million. Adani Energy Solutions is estimated to see $310 million in inflows, while Groww could receive $256 million. The four stocks together are expected to account for total inflows of $1.516 billion.
Stocks excluded from MSCI
Three stocks are set to be removed from the index, potentially resulting in outflows. Balkrishna Industries is expected to see outflows of $169 million, followed by SBI Cards at $143 million and Astral at $138 million.The three stocks together are expected to see total outflows of $450 million.
Stocks with higher weights
MSCI is also increasing the weights of seven stocks, which is expected to bring additional inflows.
Eternal is expected to see the largest inflow at $674 million, followed by Adani Enterprises at $202 million and Adani Ports at $77 million. JSW Energy is expected to attract $34 million, while Adani Power could see inflows of $28 million. GMR Airports and Swiggy are expected to see inflows of $22 million and $13 million, respectively.
Together, these weight increases are expected to bring total inflows of $1.050 billion.
Stocks with lower weights
The rebalancing will also reduce the weights of five stocks, potentially leading to outflows.
Reliance Industries is expected to see the largest outflow at $523 million, followed by Jio Financial at $61 million. Indian Hotels is expected to see an outflow of $32 million, while AB Capital and Colgate could see outflows of $21 million and $16 million, respectively.
The five stocks together are expected to see total outflows of $653 million.
Market outlook for the week
According to Sudeep Shah of SBI Securities, Nifty is trading below all its crucial moving averages. However, most of these moving averages have turned flat, reflecting the lack of a decisive trend amid the prevailing sideways momentum. Momentum indicators and oscillators are also pointing towards continued consolidation.
The daily RSI has remained in the sideways zone for the past 13 trading sessions, while the Stochastic is also oscillating within a range. With momentum indicators failing to provide a clear directional signal, price levels now hold the key to the next move.
This brings the focus back to the crucial support zone. Going ahead, the 24,000–23,950 zone is likely to act as an important support for the index, with the prior swing low and upward-sloping trendline placed in this region. A sustained move below 23,950 could trigger further correction towards 23,700 in the short term.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)