Indian Stock Markets Surpass Global Benchmarks In Equity Market Cap

Indian stock markets have been consistently reaching new highs since the formation of the new government, surpassing global benchmarks in a remarkable achievement. Recently, India has regained its position as the fourth-largest global equity market, surpassing Hong Kong. The market capitalisation of the country's BSE-listed companies surged by 10 per cent, reaching $5.2 trillion.

In contrast, Hong Kong's equity market capitalisation stands at $5.17 trillion, reflecting a decline of 5.4 per cent from its peak of $5.47 trillion earlier this year. India, on the other hand, trades at a price-to-book ratio of 3 times, whereas Hong Kong's ratio is only one time.

This development coincides with a substantial rally in the Indian stock market in recent months, attracting increased global investment funds that are expected to escalate further in the near term.

The National Stock Exchange (NSE) benchmark Nifty experienced a robust increase of nearly 6 per cent over the past month and recorded a significant growth of 11.84 per cent over the last six months. In addition, market analysts have projected that the Nifty, is anticipated to achieve a target level of 25,816 over the next 12 months.

Experts at Prabhudas Lilladher predict that the BJP-led NDA government will maintain its emphasis on growth driven by capital expenditure. They specifically foresee continued support for sectors like production-linked incentives (PLI) and infrastructure development—including roads, ports, aviation, defence, railways, and green energy, reported  IANS.

This outlook is bolstered by a 20 basis points reduction in the fiscal deficit projected for FY24, favourable predictions of a normal monsoon, and an expected dividend of Rs 2.1 trillion from the RBI.

The analysts anticipate that the NDA government will intensify its efforts to address the concerns of farmers, rural and urban poor, and the middle class. This strategic focus aims to counteract the effects of recent electoral setbacks in some states attributed to shifts in social policies and freebies.

Meanwhile, stock markets have become increasingly popular among retail investors as a preferred investment avenue. Experts point out that Indian retail investors, including High Net Worth Individuals (HNIs), are major drivers of this bullish market. Despite significant selling by Foreign Institutional Investors (FIIs), their impact is overshadowed by the robust buying activity of Domestic Institutional Investors (DIIs) and retail investors.