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India Surpasses Hong Kong, Ranks Fourth Globally in Stock Market Size

India Surpasses Hong Kong, Ranks Fourth Globally in Stock Market Size

In a remarkable achievement, India's stock market has surpassed Hong Kong's for the first time, marking another milestone for the South Asian nation, acclaimed for its growth prospects and policy reforms that have made it an attractive destination for investors. According to Bloomberg data, the combined value of shares listed on Indian exchanges reached $4.33 trillion as of Monday's close, outpacing Hong Kong's $4.29 trillion. This elevates India to the position of the fourth-largest equity market globally, with its stock market capitalization exceeding $4 trillion for the first time on December 5.

India's equity market surge is attributed to a burgeoning retail investor base and robust corporate earnings. The country, with its stable political environment and a consumption-driven economy among the world's fastest-growing, has positioned itself as an alternative to China. The nation has been successful in attracting substantial capital from global investors and companies alike.

Ashish Gupta, Chief Investment Officer at Axis Mutual Fund in Mumbai, expressed confidence in India's growth momentum, citing the favorable conditions in place. The ongoing rally in Indian stocks contrasts sharply with the historic slump in Hong Kong, where influential Chinese firms are listed. Stringent anti-COVID-19 measures, regulatory crackdowns, a property-sector crisis, and geopolitical tensions have contributed to eroding China's appeal and triggering an equities rout.

While some strategists anticipate a turnaround in Chinese stocks, UBS Group AG suggests that Chinese stocks may outperform Indian peers in 2024 due to battered valuations in the former. Meanwhile, Bernstein expects the Chinese market to recover and advises profit-taking on Indian stocks, considering them expensive.

However, current momentum appears to favor India. Pessimism toward China and Hong Kong deepened in the new year amid a lack of major economic stimulus measures. The Hang Seng China Enterprises Index is already down about 13%, hurtling toward its lowest level in almost two decades. In contrast, India's stock benchmarks are trading near record-high levels.

Foreign investors are redirecting funds from China to India, with global pension and sovereign wealth managers increasingly favoring the latter. In 2023, overseas funds poured more than $21 billion into Indian shares, contributing to the S&P BSE Sensex Index's eighth consecutive year of gains. A recent study by the Official Monetary and Financial Institutions Forum revealed a global consensus that India represents the best long-term investment opportunity, further solidifying its position in the global financial landscape.

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India Surpasses Hong Kong, Ranks Fourth Globally in Stock Market Size

India Surpasses Hong Kong, Ranks Fourth Globally in Stock Market Size

In a remarkable achievement, India's stock market has surpassed Hong Kong's for the first time, marking another milestone for the South Asian nation, acclaimed for its growth prospects and policy reforms that have made it an attractive destination for investors. According to Bloomberg data, the combined value of shares listed on Indian exchanges reached $4.33 trillion as of Monday's close, outpacing Hong Kong's $4.29 trillion. This elevates India to the position of the fourth-largest equity market globally, with its stock market capitalization exceeding $4 trillion for the first time on December 5.

India's equity market surge is attributed to a burgeoning retail investor base and robust corporate earnings. The country, with its stable political environment and a consumption-driven economy among the world's fastest-growing, has positioned itself as an alternative to China. The nation has been successful in attracting substantial capital from global investors and companies alike.

Ashish Gupta, Chief Investment Officer at Axis Mutual Fund in Mumbai, expressed confidence in India's growth momentum, citing the favorable conditions in place. The ongoing rally in Indian stocks contrasts sharply with the historic slump in Hong Kong, where influential Chinese firms are listed. Stringent anti-COVID-19 measures, regulatory crackdowns, a property-sector crisis, and geopolitical tensions have contributed to eroding China's appeal and triggering an equities rout.

While some strategists anticipate a turnaround in Chinese stocks, UBS Group AG suggests that Chinese stocks may outperform Indian peers in 2024 due to battered valuations in the former. Meanwhile, Bernstein expects the Chinese market to recover and advises profit-taking on Indian stocks, considering them expensive.

However, current momentum appears to favor India. Pessimism toward China and Hong Kong deepened in the new year amid a lack of major economic stimulus measures. The Hang Seng China Enterprises Index is already down about 13%, hurtling toward its lowest level in almost two decades. In contrast, India's stock benchmarks are trading near record-high levels.

Foreign investors are redirecting funds from China to India, with global pension and sovereign wealth managers increasingly favoring the latter. In 2023, overseas funds poured more than $21 billion into Indian shares, contributing to the S&P BSE Sensex Index's eighth consecutive year of gains. A recent study by the Official Monetary and Financial Institutions Forum revealed a global consensus that India represents the best long-term investment opportunity, further solidifying its position in the global financial landscape.

 
 
 

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