India becomes 4th largest stock market, surpassing Hong Kong

Utkarsh Classes Last Updated 25-01-2024

India becomes 4th largest stock market, surpassing Hong Kong

Economy 4 min read

The Indian stock market has overtaken Hong Kong to become the fourth largest stock market globally for the first time. According to Bloomberg, the capitalization of shares listed on Indian exchange has reached $4.33 trillion whereas Hong Kong's is $4.29 trillion. Bloomberg is a leading company providing equity trading platform and data services.

India's domestic market crosses 4 trillion dollars:

On 5 December 2023, India's stock market capitalization crossed $4 trillion for the first time. Of this, about $2 trillion came in the last four years.
Rapidly growing retail investors and robust corporate earnings contribute to the surge in Indian equities. The world's most populous country has established itself as an alternative to China.
The Indian market is now rapidly attracting new capital from global investors and companies.

The main reasons for the rapid growth in the Indian stock market are :

Rising retail investors
Continued Investment by Institutional Foreign Investors
Strong corporate earnings
Strong economic Infrastructure
The Indian stock market ranks as the fourth largest equity market globally.

Three major stock markets ahead of India:

America's stock market is at number one. Its total value is 50.86 trillion dollars.
China's stock market is in second place, with a value of 8.44 trillion dollars.
Japan's stock market is at number three. Its value is 6.36 trillion dollars.

India is now the world's growth engine:

Despite various difficulties, the Indian economy has performed better than other global economies in the period under review.
The total market value of Chinese and Hong Kong stocks has fallen by more than $6 trillion since their peak in 2021.
India has undermined China's expectations as the world's growth engine by building geopolitical ties with the West.
There are no new listings taking place in Hong Kong. It is losing its position as one of the world's busiest locations for IPO hubs.

The Indian economy is likely to improve further:

The Hang Seng China Enterprises Index, a gauge of Hong Kong-listed Chinese stocks, is already down about 13% after halting a four-year record decline in 2023.
Whereas, India's benchmark indices, Sensex and Nifty are trading near record-high levels.
Foreign funds are looking forward to investing more than $21 billion in Indian equities by 2023, according to a study by the Official Monetary and Financial Institutions Forum, a London-based think-tank. This will help the country's benchmark S&P BSE Sensex index gain for the eighth consecutive year.