India is now world's fourth-largest stock market by market capitalization
India on Tuesday surpassed Hong Kong, becoming the world's fourth-largest stock market by market capitalization. As of January 23, India's market cap reached $4.33 trillion, while Hong Kong's stood at $4.29 trillion, according to Bloomberg. The US continues to lead with a market cap of $50.86 trillion, followed by China at $8.44 trillion and Japan at $6.36 trillion.
Indian stocks' performance in 2023
In 2023, Indian stocks soared to new heights, with the Sensex and Nifty50 growing 18.8% and 20%, respectively. The BSE MidCap and SmallCap indices also experienced significant growth, jumping 45.5% and 47.5%, respectively. Some of the top performers included Tata Motors, which surged 101%, Bajaj Auto with an 88% gain, NTPC rising 87%, L&T gaining 69%, and Coal India advancing 67%.
Factors driving India's stock market growth
India's equity markets have been on an upward trajectory for eight consecutive years, fueled by positive sentiment ahead of elections, improving macroeconomic conditions, and anticipated interest rate cuts. The recent success of Narendra Modi's National Democratic Alliance (NDA) in multiple state elections has bolstered investor confidence, indicating stability as India approaches general elections in April 2024.
Hong Kong markets decline amid Chinese economic downturn
On the other hand, Hong Kong's Heng Seng experienced its fourth consecutive year of decline, while the Shanghai Stock Exchange saw its second year of losses. Factors such as China's economic downturn and pressure on American investors to divest from Chinese companies have contributed to Hong Kong's decline. In contrast, the US market performed exceptionally well in 2023, with the S&P 500 rising by 25%.
