many funds offer investments that mimic a specific index, such as the ASX300. In effect, the fund must hold a weighted basket of those specific shares. Accordingly, when a stock first enters the index, funds that track the index must buy shares to continue to mirror the index that they follow. Equally, when a share leaves the index, those funds will dispose of their shares (in an orderly manner over time to avoid a flash crash....)
Consequently, entry/exit from indices can have quite marked effects on the SP, and lead to all sorts of shenanigans!
Hope that helps.
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