On January 22, India overtakes Hong Kong to become the fourth largest in the world’s stock market rankings by market capitalization. Bloomberg data shows that Hong Kong’s market capitalization was $4.29 trillion on Tuesday, while India’s was $4.33 trillion. India achieved the first-ever crossing of $4 trillion in stock market capitalization on December 5, with nearly half of that amount occurring in the last four years.
With a market capitalization of $50.86 trillion, the US leads the world’s markets, followed by China ($8.44 trillion) and Japan ($6.36 trillion).
India possesses all the necessary components to accelerate growth, according to Ashish Gupta, chief investment officer of Mumbai’s Axis Mutual Fund, who spoke with Bloomberg.
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Reasons for the Growth of India’s Stock Market
Rising retail investor participation, steady foreign institutional investor (FII) inflows, solid corporate earnings, and solid domestic macroeconomic fundamentals all contributed to the Indian stock market’s recent surge.
Investor confidence has increased following the National Democratic Alliance (NDA) recent victories in several state elections, indicating stability ahead of India’s central government elections in April 2024. Analysts predict sustained policies and efforts to push India’s economy towards the coveted Rs 5 trillion level if Modi and the BJP-led NDA win a third consecutive term.
Given its stable political environment and consumption-driven economy, which continues to be among the fastest-growing of all major countries, India has also established itself as a viable option to China, drawing new investment from both international investors and corporations, according to Bloomberg.
Indian Stock Market performance in FY 2023-24
Sensex and Nifty both increased by 18.8% and 20% in 2023, while BSE MidCap and SmallCap had increases of 45.5 percent and 47.5 percent, respectively. Tata Motors vaulted 101 percent, Bajaj Auto climbed 88 percent, NTPC rose 87 percent, L&T gained 69 percent, and Coal India surged 67 percent among the top gainers.
Also Read: 2023 A Year Of Records For India’s Stock Market
Reason for the Slump in Hong Kong’s Stock Market
The stock market in Hong Kong is home to some of the most significant and inventive enterprises in China. Chinese stocks have taken a significant knock due to Beijing’s strict anti-Covid-19 regulations, regulatory crackdowns on firms, a property-sector crisis in which many chinese real estate developers are currently facing the possibility of bankruptcy because they overreached themselves and took on excessive debt from overseas investors in Hong Kong and also there are geopolitical tensions with the West.
From 2021 until the present, the market value of Hong Kong and Chinese stocks has decreased by around $6 trillion.