January 23, 2024 (MLN): India’s stock market capitalization has surpassed Hong Kong’s for the first time, making it the fourth-largest equity market globally. This shift is attributed to India’s promising growth prospects and policy reforms, attracting investors as global capital diverts from China.
The combined value of shares listed on Indian exchanges reached $4.33 trillion, surpassing Hong Kong’s $4.29 trillion. India’s market value crossed $4 trillion for the first time on December 5, 2023, with a significant portion of this increase occurring in the past four years.
India’s equities have experienced significant growth, driven by a rapidly expanding retail investor base and robust corporate earnings. The country has positioned itself as an attractive alternative to China, drawing global investors and companies with its stable political environment and a consumption-driven economy that ranks among the fastest-growing globally.
In contrast, Hong Kong has faced challenges, including a historic slump, stringent anti-Covid-19 measures in China, regulatory crackdowns, a property-sector crisis, and geopolitical tensions, diminishing China’s appeal as a global growth engine.
Analysts view India as a compelling structural growth story, citing its demographic advantage, a surge in educated youth, and a progressive government implementing key structural reforms. Meanwhile, Chinese and Hong Kong equities have experienced a significant decline, with their total market value falling by over $6 trillion since their peaks in 2021. Hong Kong has seen a decline in new listings, losing its status as one of the world’s busiest venues for initial public offerings.