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India pips Hong Kong to take 4th place on biggest stock exchange list

The bull statue at Bombay Stock Exchange (BSE) building in Mumbai.(PTI)

For the first time, India’s stock market has surpassed Hong Kong’s to rank as fourth-biggest equity market in the world. The total value of shares listed on Indian exchanges reached $4.33 trillion as of Monday’s close, exceeding Hong Kong’s $4.29 trillion.

According to Bloomberg data, the Indian stock market capitalisation surpassed $4 trillion for the first time on December 5, with about half of that coming in the past four years.

What is leading to boom in India’s stock market?

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Equities in India have been witnessing a boom due to a rapidly growing investor base, sustained inflows from foreign institutional investors (FII) and strong corporate earnings as well as robust domestic macroeconomic fundamentals.

According to Bloomberg, India has positioned itself as an alternative to China, with increasing inflow of fresh capital from global investors and companies alike.

More investments are coming to India “thanks to its stable political setup and a consumption-driven economy that remains among the fastest growing of major nations,” the report said.

In 2023, more than $21 billion overseas funds were pumped into Indian shares, helping the country’s benchmark S&P BSE Sensex Index cap an eighth consecutive year of gains.

Largest equity markets in the world

Currently, the US is the world’s biggest market with a market cap (mcap) of $50.86 trillion, followed by China with a mcap of $8.44 trillion and Japan at $6.36 trillion.

India now ranks number fourth with mcap at $4.33 trillion.

Hong Kong markets see a slump

The rally in Indian stocks has coincided with a historic slump in Hong Kong markets where some of China’s most influential and innovative companies are listed.

As per reports, the total market value of Chinese and Hong Kong stocks plunged by more than $6 trillion since their peaks in 2021.

China has been witnessing a downturn in its economy due to stringent anti-COVID-19 curbs, regulatory crackdowns on corporations, a property-sector crisis and geopolitical tensions with the West. All this has diminished China’s appeal as a global growth engine.

China has also been losing its status as one of the world’s busiest venues for initial public offerings (IPO) as new listings have dried up in Hong Kong.

With inputs from Bloomberg

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