BENGALURU, Oct 27 (Reuters) - Indian shares reversed course to trade higher on Tuesday on hopes of higher inflows after MSCI said it will make changes to its global indexes following revisions in the country’s foreign ownership limits.
The NSE Nifty 50 index rose 0.15% to 11,785.7 by 0451 GMT, having earlier declined up to 0.4%, while the S&P BSE Sensex was up 0.1% at 40,183.13.
MSCI said on Monday it would will implement changes in foreign ownership limits (FOL) in the MSCI global indexes containing Indian securities in November.
“Because of the FOL rule change the free float of Indian stocks will go up, so investors are expecting this would help the weightage of Indian stocks in the MSCI indexes,” said Samrat Dasgupta, chief executive of Esquire Capital Investment Advisors.
Boosting the market, Kotak Mahindra Bank jumped over 11% after it beat expectations for September-quarter profit on Monday. The wider Nifty private banking index rose about 1%.
The Nifty FMCG index also gained about 1.1%, led by a 4.2% rise in Nestle Ltd.
The expectation of higher foreign inflows following MSCI’s index recast is keeping markets away from a free fall, said Anand James, chief market strategist at Geojit Financial Services.
The Nifty IT index fell 1.1% led by a 2% decline in Infosys Ltd. The Nifty state-owned banking index was down about 0.9%.
Telecom operator Bharti Airtel and automaker Tata Motors are the blue-chips scheduled to report earnings later in the day.
Meanwhile, sentiment was weak across Asia as concerns grew over a second wave of virus infections in the United States and Europe, sending MSCI’s gauge of Asia-Pacific stocks outside Japan down 0.43%. (Reporting by Derek Francis in Bengaluru; Editing by Aditya Soni)
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