The index provider said it will remove 60 stocks from the MSCI China Index this month, following 56 deletions in May and 66 in February, the highest tally in at least two years. At the end of July, China represented 22.33% of the Emerging Markets gauge.

The changes, effective after the close on Aug. 30, will also apply to the MSCI All Country World Index. Stocks slated for removal include Ganfeng Lithium Group Co. and Flat Glass Group Co.

MSCI’s changes underscore the increasingly grim prospects for the world’s second-largest economy, as Chinese shares risk losing their outsized presence in emerging market portfolios to peers such as India and Taiwan.

The deletions may further increase the downside for China’s already battered market, with index-tracking funds forced to sell these shares. The largest such fund, the US-listed iShares MSCI China ETF, is part of the at least $7.9 billion tracking the MSCI China Index.

These deletions will help “even the playing field for EM investors,” said Marvin Chen, a strategist with Bloomberg Intelligence in Hong Kong. “The large weighting and impact of China earlier may be more evenly distributed to other markets such as India, Korea and Taiwan.”

Global funds have been steadily pulling out of China as the economic slump deepens, with stimulus measures failing to stem the slide. They turned net sellers of local stocks for the year on Friday. If this trend continues, China may see the first annual outflow since Bloomberg began tracking purchases via the trading links with Hong Kong in 2016. 

In contrast, MSCI said it will add seven stocks to its India gauge, including Samsung Electronics Co.’s supplier Dixon Technologies India Ltd. The index provider will remove Bandhan Bank Ltd., and gradually raise HDFC Bank Ltd.’s weight. 

HDFC Bank is set to gain the most, with its increased weight likely to attract $1.8 billion of inflows in the near term and another $1.8 billion by November, Abhilash Pagaria, head of alternative and quantitative analysis at Nuvama Wealth Management Ltd., wrote in a note. 

MSCI will also resume free-float data updates on Adani Group stocks in its indexes, after putting them on hold early last year due to the fallout from Hindenburg Research’s allegations against the conglomerate. The group has consistently denied the claims made by the US short seller.  

While “India rising above China’s weight may take more time as MSCI has decided to increase HDFC Bank’s weight in a staggered manner,” it will be partially offset by the higher weight for some Adani stocks, said Auckland-based analyst Brian Freitas, who writes for independent research provider Smartkarma.