India Overtakes Hong Kong As World's Fourth-Largest Stock Market

The combined value of shares listed on Indian stock exchanges hit $4.33 trillion as of Monday’s close, against $4.29 trillion for Hong Kong

For the first time, India's stock market has overtaken Hong Kong's. News agency Bloomberg in its report said the combined value of shares listed on Indian stock exchanges hit $4.33 trillion as of Monday’s close, against $4.29 trillion for Hong Kong. As per Bloomberg data, this makes India the fourth-biggest equity market globally. India’s stock market capitalisation crossed $4 trillion for the first time on December 5, with about half of that coming in the past four years.

According to Bloomberg report, stocks in India have been booming, thanks to a rapidly growing retail investor base and strong corporate earnings. India has also positioned itself as an alternative to China, attracting fresh capital from global investors and companies alike, thanks to its stable political setup and a consumption-driven economy that remains among the fastest-growing of major nations.

Ashish Gupta, chief investment officer at Axis Mutual Fund in Mumbai, said, “India has all the right ingredients in place to set the growth momentum further.”

The relentless rally in the stock market has coincided with a historic slump in Hong Kong, where some of China’s most influential and innovative firms are listed. Beijing’s stringent anti-Covid-19 curbs, regulatory crackdowns on corporations, a property-sector crisis and geopolitical tensions with the West have all combined to erode China’s appeal as the world’s growth engine.

They have also triggered an equities rout that’s now reaching epic proportions, with the total market value of Chinese and Hong Kong stocks having tumbled by more than $6 trillion since their peaks in 2021. New listings have dried up in Hong Kong, with the Asian financial hub losing its status as one of the world’s busiest venues for initial public offerings.

However, some strategists expect a turnaround. UBS Group AG sees Chinese stocks outperforming Indian peers in 2024 as battered valuations in the former suggest significant upside potential once sentiment turns, while the latter is at “fairly extreme levels,” according to a November report. Bernstein expects the Chinese market to recover, and recommends taking profits on Indian stocks, which it sees as expensive, according to a note earlier this month.

However, on Tuesday, Sensex and Nifty, plunged sharply. Sensex sank 700 points, while Nifty50 was trading below 21,350.