India’s stock market has overtaken Hong Kong’s for the first time in another feat for the South Asian nation whose growth prospects and policy reforms have made it an investor darling.
The combined value of shares listed on Indian exchanges reached $4.33 trillion as of Monday’s close, versus $4.29 trillion for Hong Kong, according to data compiled by Bloomberg.
That makes India the fourth-biggest equity market globally. Its stock market capitalization crossed $4 trillion for the first time on Dec. 5, with about half of that coming in the past four years.
Equities in India have been booming, thanks to a rapidly growing retail investor base and strong corporate earnings.
The world’s most populous country has positioned itself as an alternative to China, attracting fresh capital from global investors and companies alike, thanks to its stable political setup and a consumption-driven economy that remains among the fastest-growing of major nations.
The relentless rally in Indian stocks has coincided with a slump in Hong Kong, where some of China’s most influential and innovative firms are listed. Beijing’s stringent anti-Covid-19 curbs, regulatory crackdowns on corporations, a property-sector crisis and geopolitical tensions with the West have all combined to erode China’s appeal as the world’s growth engine.
Foreigners who until recently were enamored with the China narrative are sending their funds over to its South Asian rival.
Global pension and sovereign wealth managers are also seen favoring India, according to a recent study by London-based think-tank Official Monetary and Financial Institutions Forum.
Overseas funds poured more than $21 billion into Indian shares in 2023, helping the country’s benchmark S&P BSE Sensex Index cap an eighth consecutive year of gains.
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