In a noteworthy achievement, India’s stock market has surpassed Hong Kong’s for the first time, marking another milestone for the South Asian nation. The investor-friendly environment, coupled with promising growth prospects and proactive policy reforms, continues to elevate India’s standing as an attractive destination for investment.
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As reported by Bloomberg, the aggregate value of shares listed on Indian exchanges achieved a milestone, reaching $4.33 trillion at the close of Monday, surpassing Hong Kong’s $4.29 trillion. This positions India as the world’s fourth-largest equity market. Notably, India’s stock market capitalization surpassed $4 trillion for the first time on December 5, with approximately half of this remarkable growth occurring in the past four years.
Reacting to the development, Union Minister Hardeep Singh Puri said, “Lord Ram is blessing us. We are the fifth-largest economy and the fourth-largest stock market. I think that in the next 1-2 years, we will not only be the fourth-largest economy but we will go further ahead. I was somewhere that we would be a 5 trillion economy by 2028. I told him that there is no need to wait until 2028, it will happen by 2024-25. We will then be a 10 trillion dollar economy by 2030. Global interest in India is increasing every day…It is looking very good.”
Alternative to China
The report added that India’s stock market is experiencing a surge, propelled by a swiftly expanding retail investor community and robust corporate earnings. As the world’s most populous country, India has emerged as a compelling alternative to China, drawing substantial investments from both global investors and corporations. This attraction can be attributed to India’s stable political environment and a consumption-driven economy that continues to rank among the fastest-growing among major nations.
The continuous surge in Indian stocks aligns with a significant downturn in Hong Kong, home to some of China’s most influential and innovative companies. Beijing’s strict anti-COVID-19 measures, regulatory actions against corporations, a crisis in the property sector, and geopolitical tensions with Western nations have collectively diminished China’s allure as the global growth engine.
These factors have also sparked a severe downturn in equities, reaching unprecedented levels, as the combined market value of Chinese and Hong Kong stocks has plummeted by over $6 trillion since their peaks in 2021. In Hong Kong, the absence of new listings has resulted in the loss of its status as one of the globe’s most active venues for initial public offerings.
Outlook 2024
However, the report also said that there is optimism among certain strategists for a reversal of fortunes. UBS Group AG anticipates that Chinese stocks will outshine their Indian counterparts in 2024. The battered valuations in Chinese stocks indicate substantial upside potential once sentiment improves, contrasting with India where, as noted in a November report, valuations are considered to be at “fairly extreme levels.”
Bernstein anticipates a recovery in the Chinese market and advises capitalizing on profits from Indian stocks, perceived as expensive, as stated in a note earlier this month.
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