India has emerged as a compelling alternative to China, drawing substantial investment from global corporations and investors due to its stable political environment and a thriving consumption-driven economy.
In a noteworthy achievement, India’s stock market has secured the position of the fourth-largest equity market globally, surpassing Hong Kong. According to Bloomberg data, India’s market capitalization reached $4.33 trillion, outpacing Hong Kong’s $4.29 trillion. The United States maintains its lead as the world’s largest equity market, boasting a remarkable market capitalization of $50.86 trillion. China closely follows with a market capitalization of $8.44 trillion, while Japan holds the third position at $6.36 trillion.
The surge in India’s stock market is attributed to the rapid expansion of its retail investor base, sustained inflows from foreign institutional investors (FII), robust corporate earnings, and strong domestic macroeconomic fundamentals. The government’s initiatives towards digitization and financial inclusion have played a pivotal role in attracting both domestic and foreign investors. Furthermore, the successful implementation of the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code (IBC) has enhanced the overall ease of doing business in the country.
Ashish Gupta, Chief Investment Officer at Axis Mutual Fund in Mumbai, highlighted that India possesses the necessary elements to propel further growth, expressing optimism about the country’s economic momentum.
India’s appeal as an alternative to China has been reinforced by its stable political landscape and consumption-driven economy, positioning it as one of the fastest-growing major nations. Meanwhile, Hong Kong has faced significant challenges, experiencing a downturn in its markets, partly due to stringent measures against COVID-19, regulatory scrutiny on corporations, challenges in the property sector, and geopolitical tensions with Western nations. This has led to a depreciation in the aggregate market capitalization of Chinese and Hong Kong-based stocks, declining by over $6 trillion from their 2021 peaks, according to Bloomberg.
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