Suzlon, IndusInd Shares Surge On MSCI Index Rejig

Shares of Suzlon Energy Ltd. surged to 12-year high, IndusInd Bank Ltd. hit a 46-month high, and seven other Indian stocks advanced on Wednesday after MSCI Inc.'s rejig of its Emerging Markets Index.

Tata Motors A, IndusInd Bank Ltd., Polycab India Ltd. and Macrotech Developers Ltd. were added to the large-cap index, whereas Paytm parent One 97 Communications Ltd. and Tata Communications Ltd. were added to the mid-cap index.

APL Apollo Tubes Ltd., Persistent Systems Ltd., and Suzlon Energy Ltd. were upgraded to a mid-cap index from small-cap index, according to the latest rejig in the November review.

The changes will come into effect after the market closes on Nov. 30.

Shares of Suzlon Energy rose as much as 4.79% to Rs 40.50 apiece, the highest since Aug. 10, 2011. It pared gains to trade 4.53% higher at Rs 40.40 apiece, compared to a 0.99% advance in the benchmark NSE Nifty 50 as of 10.26 a.m.

The shares have risen 281.6% on a tear-to-date basis. The total traded volume so far in the day stood at 1.4 times its 30-day average. The relative strength index was at 83, implying that the stock maybe overbought.

Both the analysts tracking Suzlon Energy maintain a 'buy' rating on the stock, according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 9.7%.

Shares of IndusInd Bank rose as much as 1.91% to a 46-month high of Rs 40.50 apiece, the highest since Jan. 15, 2020. It pared gains to trade 0.37% higher at Rs 1,515.25 apiece compared to a 0.96% advance in the Nifty as of 9.56 a.m.

The shares have risen 24.79% on a year-to-date basis. The total traded volume so far in the day stood at 3.8 times its 30-day average. The relative strength index was at 65.

Forty-five out of 48 two analysts tracking IndusInd Bank maintain a 'buy' rating on the stock, two recommend a 'hold' and one suggests a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 11.7%.

Post-rebalance, India's stock count will rise to 131 and the weights are set to move close to 16.3% compared to the current 15.9%, Nuvama Institutional Equities said in a note. India's representation in the EM index will reach an all-time high, marking a significant increase over the past three years, almost doubling its weight, it said.

India should receive passive inflows of close to $1.5 billion after the rebalance, Nuvama said.