India surpasses Hong Kong to become world’s fourth-largest stock market for first time

India surpasses Hong Kong to become world’s fourth-largest stock market for first time
via Naveed Ahmed on Unsplash
Michelle De Pacina
By Michelle De Pacina
January 23, 2024
India’s stock market capitalization has surpassed Hong Kong’s for the first time, making the South Asian nation the fourth-largest equity market globally.
India’s growth: As of Monday’s close, India‘s stock market capitalization reached $4.33 trillion compared to Hong Kong’s $4.29 trillion, reported Bloomberg. The surge in Indian equities is attributed to a growing retail investor base, strong corporate earnings and the country positioning itself as an alternative to China. India’s stability, consumption-driven economy and demographic advantages make it an attractive investment destination. 
China’s challenges: China, facing challenges like anti-COVID-19 measures, regulatory crackdowns, a property-sector crisis and geopolitical tensions, has seen a historic slump in its stock market. Foreign investors are reportedly redirecting funds from China to India, with global pension and sovereign wealth managers favoring the South Asian nation. 
Significant decline: Chinese and Hong Kong equities have been experiencing significant decline, with their total market value dropping by over $6 trillion since 2021 peaks. Hong Kong has lost its status as a top venue for initial public offerings due to a lack of new listings. 
“The best long-term investment”: Although UBS Group AG anticipates a turnaround in 2024, momentum currently favors India as over $21 billion in foreign funds flowed into Indian shares in 2023, contributing to the country’s eighth consecutive year of gains for the benchmark S&P BSE Sensex Index. According to Goldman Sachs strategists, “there is a clear consensus that India is the best long-term investment opportunity.”
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