(Bloomberg) -- MSCI Inc. further trimmed Chinese stocks after Beijing’s stimulus blitz failed to halt the market’s diminishing presence in regional benchmarks, even as it added more Indian equities to its measures.
The gauge owner will remove 20 stocks from the MSCI China Index this month, following more than 55 deletions in each of its last three reviews. In contrast, it added five names to the MSCI India Index. The changes, effective after the close on Nov. 25, will also apply to the MSCI All Country World Index.
The revision, which coincides with Donald Trump’s emphatic victory in the US election, underscores how China’s stimulus efforts are far from fixing its structural economic issues. The market also risks losing its outsized presence in emerging market portfolios to peers such as India amid ongoing tensions with the West.
While China continues to have the highest representation in the MSCI EM Index, with a weight of 27%, “there is enormous potential for far more additions to happen for India,” Abhilash Pagaria, an analyst at Nuvama Wealth Management Ltd., wrote in a note.
Some of the Chinese stocks slated for removal include Tesla Inc. supplier Ningbo Joyson Electronic Corp., sportswear maker Topsports International Holdings Ltd. and movie producer Wanda Film Holding Co. Meanwhile, additions to the India gauge include drugmaker Alkem Laboratories Ltd. and property developer Oberoi Realty Ltd.
Read: Trump’s China Threat Has Investors Favoring India, Japan Stocks
Equity gauges have rallied in Hong Kong and China on expectations that Beijing will roll out more stimulus when its key legislative body meets Friday, though the bar is high for further gains.
On the other hand, Indian equities can see passive foreign inflows of about $2.5 billion due to MSCI’s moves, Pagaria said.
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