Index moves

The share price of Tesla jumped by 14 per cent immediately after the announcement of its inclusion in the S&P 500 Index, making a big splash. Back home in India, MSCI (which is an index provider) announced the inclusion of five companies and the exclusion of two companies from the MSCI India Domestic Index (inclusions: Adani Green Energy, L&T Infotech, Muthoot Finance, PI Industries and Yes Bank; exclusions: Bosch and LIC Housing). It also announced inclusion of 18 companies and exclusion of seven in its India Domestic Small Cap Index. It is natural for investors to wonder whether they should consider purchasing the shares of these companies in order to benefit from any potential upside. But before we discuss all these, let's get back to basics. What is an index ? To put in simple words, an index is just a list of stocks. More specifically, it is just a list of stocks compiled by someone based on a predefined-objective criteria. An example could be a list of the top 10 companies that have generated the highest amount of profits in t