HDFC Bank Falls, Zee Entertainment Gains on MSCI Rejig

Shares in HDFC Bank fell nearly 2 per cent to a day low of Rs 898.50 on Friday as the MSCI removed the stock from its MSCI India index.

HDFC Bank had a weightage of 1.9 per cent in the MSCI India index. MSCI in its earlier review has said HDFC Bank will be excluded from the MSCI India index if FII (Foreign Institutional Investors) limit issue is not resolved before November 2014.

HDFC Bank had sought Foreign Investment Promotion Board's (FIPB) approval to increase the foreign shareholding in the company to 74 per cent, which has been pending since last year.

The other stocks which had been excluded from the MSCI India index are Reliance Capital, Reliance Power, Jaiprakash Associates. All these stocks were down between 0.5 per cent to 2 per cent.

MSCI has added Zee Entertainment and Motherson Sumi Systems to the MSCI India index, which was up 2.5 per cent and 2 per cent respectively.

All the above changes to the MSCI India will be effective from November 25, 2014.

The stocks which had been added to the MSCI India index are likely to witness buying from passive foreign funds which track the return of the MSCI India index. Likewise the stocks which had been excluded from the index are likely to witness selling from passive funds.