With 25% gains this year, India outperforms top 10 markets
India's market capitalization has seen a significant 24.8% increase in 2023, reaching $4.16 trillion and maintaining its fifth position globally. This impressive growth marks the steepest rise since 2021 and the fifth consecutive year of expansion. Indian stock market has outperformed the top 10 global markets this year, thanks to strong macroeconomic fundamentals and investments from both foreign and domestic institutions.
US and China market performance
The US market remains the leader with a valuation of $50.35 trillion, growing by 22.61% in 2023. The Dow Jones Industrial Average (DJIA) saw a 12.8% increase throughout the year. On the other hand, China's market capitalization dropped by 8.81% to $10.57 trillion due to economic struggles, a property crisis, and a slow recovery from COVID-19. The Shanghai Composite in China fell by 5.7% in 2023.
Other global markets
Japan's market cap rose by 11.6% to $6.09 trillion, while Hong Kong experienced a decline of about 12.6%, dropping to $4.56 trillion. In Europe, France's market cap surged 13.77% to $3.27 trillion, and the UK market expanded by 5.3% to $3.07 trillion. Saudi Arabia, Canada, and Germany also reported increases in market capitalizations by 13.1%, 6.63%, and 12.25%, respectively, reaching $2.97 trillion, $2.89 trillion, and $2.39 trillion.
Bullish economy and investor sentiment
In the first half of FY24, India logged a 7.7% of GDP growth. This led the Reserve Bank of India (RBI) to revise its FY24 GDP forecast to 7%. For FY25, the RBI predicts an average growth of 6.5% in the first three quarters. Analysts at Motilal Oswal expect a Nifty EPS average growth rate of around 20% for FY23-25, potentially leading to further market re-rating. The recent electoral victories of BJP have also strengthened investor confidence in political stability.
