(Reuters) -Index provider MSCI will count U.S. bitcoin investor MicroStrategy among 42 additions to its widely tracked world index while more firms from India join its emerging markets index, following a quarterly review.

They are closely watched as billions of dollars invested in exchange-traded funds track MSCI indexes and they are used as a performance benchmark for fund managers.

In total, there are 42 securities to be added and 121 cut from the all-country world index.

The three largest additions will be U.S. companies: software firm and bitcoin investor MicroStrategy, data storage company Pure Storage and mechanical and electrical construction firm Emcor.

"All represent the direction of new economy development," said Kenny Ng, a strategist at China Everbright Securities International in Hong Kong.

MSCI reviews its indexes to reflect moves in market value of constituents, among other factors. The changes, which will take effect at market close on May 31, usually drive a spike in turnover.

Traders are alert this time for possible disruption as the rebalance falls only a few days after the U.S. shortens its stock-trading settlement cycle from two days to one on May 28.

Elsewhere, India's Canara Bank, Indonesian chemical firm Chandra Asri Pacific and Indian power generator JSW Energy will be the three largest additions to the MSCI emerging markets index.

The three largest additions to the frontier markets index will be Kazakhstan carrier Air Astana, Croatia's electrical-equipment maker Koncar Distributivni I and Romanian telco Digi Communications.

New York-based MSCI said it will add six and delete 70 securities from the China A Onshore Index. The three largest additions will be steel manufacturer CITIC Pacific Special Steel, energy firm CNOOC and forklift manufacturer Hangcha Group.

The company said foreign listings will become eligible for the MSCI Sweden Indexes starting from the November quarterly index review as the market has met the foreign listing materiality requirements.

MSCI will also resume review of Egyptian and Kenyan securities after hearing from market participants that liquidity and foreign exchange access had improved there.

Special treatment for equities listed in Bangladesh in the MSCI indexes will remain due to accessibility issues, MSCI said.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shounak Dasgupta, Shailesh Kuber and Subhranshu Sahu)