MSCI Rebalance Puts Indian Stocks Under Trading Spotlight

MSCI is changing which Indian companies are included in one of its important stock indexes.

Four companies will be added, while three will be removed.

Some other companies will receive larger or smaller shares in the index.

These changes can make investment funds buy or sell large amounts of shares.

Laurus Labs is expected to receive the largest inflow among the new additions.

Reliance Industries is expected to face the biggest outflow because its index weight is being reduced.

The changes will be reflected in trading at Monday’s close and take effect from September 1.

The event will also test India’s new system for deciding official closing prices.

Large orders could cause sharp price movements, especially in less-traded stocks.