India overtakes Hong Kong as fourth largest stock market; here is what experts say

Indian share market today: The Indian stock market, as per reports, has pipped Hong Kong as the fourth largest stock market globally. The data compiled by Bloomberg revealed that the total value of shares listed on Indian bourses scaled to USD 4.33 lakh crore in the previous session as against USD 4.29 trillion for Hong Kong.

Among the top equities markets globally, the US markets hold the top spot, followed by China and Japan.

India’s equity markets m-cap breached USD 4 lakh crore levels for the first time in December last year.

“Cumulatively, the past 12 months have been stellar for investors who parked their money in Indian stocks. Though there has been some turbulence, the calendar year 2023 gave handsome monetary dividends to stock market investors. In 2023 itself, Sensex and Nifty gained 17-18 per cent, on a cumulative basis,” pointed out an ANI report. 

In contrast as per the data, Hong Kong’s index Hang Seng in a historic slump posted an overall decline of 32-33 per cent during the last one year. 

On the remarkable achievement, Suman Banerjee, CIO, of Hedonova, a Paris-based hedge fund said, “ This momentous milestone underscores the resilience and dynamism of India's economic landscape. As the nation forges ahead, investor confidence and opportunities converge, propelling the stock market to new heights. This achievement marks not only a numerical triumph but also signifies India's emergence as a key player in the international financial arena,” 

It is a testament to the nation's economic fortitude and signals a promising trajectory for investors navigating the diverse and vibrant landscape of the Indian stock market, he added.

Chokkalingam G, Founder, of Equinomics Research on the development said that it is on the expected line as both the Chinese and Hong Kong economies are seeing significant growth slowdown while the Indian economy gets an upgrade in its GDP growth forecasts. Further, he sees the country to retain the title as the fourth largest equities market going forward.

“While the Chinese economy has seen growth slowing down to 5.2% in Q4FY2023, Hong Kong economy is expected to grow around 3.3% in 2023 and further growth rate is expected to contract to 2.7%. In contrast, the Indian economy is expected to maintain the fastest GDP growth in the range of 6.5% to 7% in 2024. Therefore, it is most likely that the Indian market will retain this 4th position in market cap ranking for a much longer period,” the expert added.

Tanvi Kanchan, Head - Corporate Strategy, Anand Rathi Shares and Stock Brokers on the milestone remarked that the Indian stock market's impressive performance can be attributed to several factors, including a growing retail investor base, consistent inflows from foreign institutional investors (FII), strong corporate earnings, and robust domestic macroeconomic fundamentals.

"India has emerged as an attractive alternative to China, attracting both global investors and companies due to its stable political environment and a consumption-driven economy that ranks among the fastest-growing in the world.  In contrast, Hong Kong's markets have experienced a decline, despite being home to influential and innovative Chinese companies. The combined market value of Chinese and Hong Kong stocks has plummeted by over $6 trillion since reaching their peaks in 2021. This decline can be attributed to Beijing's strict anti-COVID-19 measures, regulatory crackdowns on corporations, a crisis in the property sector, and geopolitical tensions with Western countries. Additionally, Hong Kong is losing its status as one of the world's busiest venues for initial public offerings (IPOs) as new listings have significantly decreased," the expert added.