India’s stock market has surpassed Hong Kong’s for the first time, with the combined value of shares listed on Indian exchanges reaching $4.33 trillion as of Monday’s close, compared to Hong Kong’s $4.29 trillion, according to Bloomberg data. This positions India as the world’s fourth-largest equity market. The milestone was achieved on December 5 when India’s stock market capitalization exceeded $4 trillion, with half of that growth occurring in the past four years.
Hong Kong’s decline is attributed to a diminishing appeal for Chinese companies. Many of China’s influential and innovative firms are listed in Hong Kong, but factors such as Beijing’s stringent anti-Covid-19 measures, regulatory crackdowns on corporations, a property-sector crisis, and geopolitical tensions with the West have adversely affected Chinese stocks. The combined market value of Chinese and Hong Kong stocks has declined by over $6 trillion since their peaks in 2021. Additionally, Hong Kong has experienced a slowdown in new listings, losing its status as one of the world’s busiest venues for initial public offerings.
“India has all the right ingredients in place to set the growth momentum further,” Ashish Gupta, chief investment officer at Axis Mutual Fund in Mumbai, told Bloomberg.
Bernstein expects the Chinese market to recover, and recommends taking profits on Indian stocks, which it sees as expensive, according to a note earlier this month.
