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.“India
has all the right ingredients in place to set the growth momentum further,”
said Ashish Gupta, chief investment officer at Axis Mutual Fund in Mumbai.
The relentless rally in Indian stocks has
coincided with a historic 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.They have also triggered an equities rout that’s
now reaching epic proportions, with the total market value of Chinese and Hong
Kong stocks having tumbled by more than $6 trillion since their peaks in 2021. New listings have dried up in Hong Kong,
with the Asian financial hub losing its status as one of the world’s busiest
venues for initial public offerings
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.
“There is a clear consensus that India is
the best long-term investment opportunity,” Goldman Sachs Group Inc.
strategists including Guillaume Jaisson and Peter Oppenheimer wrote in a note
Jan. 16 with results of a survey from the firm’s Global Strategy Conference.