Bourses: With a $4 trillion m-cap, India is now the fourth-largest equity market in the world
Virendra Pandit
New Delhi: Hitting the historic milestone of USD 4 trillion worth of market capitalization on Wednesday for the first time, Indian equity markets became the fourth-largest worldwide after the US, China, and Japan.
The market in Hong Kong is also part of this club. However, a large contribution to it comes from companies based mainly in China and elsewhere. The other countries in the Top 10 m-cap club are France, the UK, Canada, Saudi Arabia, and Germany.
The market value of all companies listed on India’s premier Bombay Stock Exchange (BSE) reached a record high of INR 333 trillion, or USD 4 trillion, on Wednesday.
With a market cap of nearly USD 48 trillion, the US is by far the world’s largest equity market, followed by China (USD 9.7 trillion) and Japan (USD 6 trillion).
According to reports, India’s market cap has risen nearly 15 percent so far this calendar year (2023), while China’s witnessed a 5 percent erosion. At 17 percent, the US is the only market in the top-10 market cap club which has grown at a faster clip than India. The combined world market cap has grown 10 percent this year to USD 106 trillion.
The m-cap gains in 2024 were propelled by gains in the broader market mid-and small-cap stocks. The stocks outside the top 100 now contribute 40 percent to the country’s market cap, up from 35 percent at the start of this financial year.
Since April 1, India’s m-cap has risen 27 percent. The m-cap of top 100 companies has grown 17 percent to INR 195 trillion, while those outside the top 100 have seen their market value surge 46 percent to INR 133 trillion.
Experts said India achieving the new milestone of USD 4 trillion worth of m-cap will burnish its image as the go-to-market in the Asia and Emerging Market (EM) basket.
India’s strong earnings, macro stability, and domestic flows make it a standout market. In recent weeks, about half a dozen foreign brokerages, such as Goldman Sachs, JPMorgan, Morgan Stanley, and CLSA, have recommended higher allocation to India in the EM and Asia Pacific (APAC) basket even as valuations remain pricey vis-à-vis its peers.
“India has the best structural growth prospects in the region. We believe GDP growth is likely to stay robust at 6.3 percent year-on-year in 2024. While the external macro backdrop of high for longer rates, persistent dollar strength, lower China growth, and greater geopolitical uncertainty, could potentially lead to elevated market volatility in the region, India is relatively less sensitive to these external shocks,” the media reported Sunil Koul, APAC Equity Strategist, Goldman Sachs, as saying.
Earlier this month, this US-based brokerage house upgraded its stance on the Indian markets to ‘overweight.’
