India’s Market Capitalization Surge
Context:
India’s equity market cap surpasses Hong Kong, securing the fourth position globally. As of January 23rd, the total valuation of Indian listed companies reaches $4.33 trillion, outpacing Hong Kong’s $4.29 trillion.
- Top three are the US, China and Japan.
Relevance:
GS-03 (Economy)
Rapid Market Expansion:
- India’s market cap doubles from $2 trillion in just four years, marking a significant and swift expansion.
- Only the US, China, and Japan now boast larger equity markets than India.
- Indian exchanges reached USD 4.33 trillion, versus USD 4.29 trillion for Hong Kong, on January 22nd, 2024.
Stock exchange:
- A stock exchange functions as a systematically organized market where approved securities can be easily bought and sold.
- Transactions within the stock exchange occur between its members or their authorized agents, and all dealings are governed by the established rules and bylaws.
- The stock exchange plays a crucial role in providing comprehensive information to the public regarding the pricing and daily transaction volumes of securities.
- It serves as a transparent platform that facilitates the efficient exchange of securities while ensuring regulatory compliance.
Stock Index:
- A stock index, in essence, is a statistical measure indicating changes in the prices of stocks of companies registered in the stock market.
- It acts as a barometer, reflecting overall market sentiment and the direction of price movements in financial, commodities, or other markets.
- Investors often use stock market indices as a reference to discern general market patterns, aiding them in making informed decisions regarding stock investments.
Driving Forces Behind India’s Rally:
- Favorable domestic growth dynamics and global capital inflows power India’s market rally.
- Robust participation from Indian retail investors and steady foreign inflows contribute to the upward momentum.
- Strong corporate earnings growth in the post-pandemic rebound further supports the market surge.
Major Stock Indices in India:
- NIFTY 50: Diversified 50-stock index of the National Stock Exchange (NSE), representing 13 sectors.
- BSE SENSEX: Free-float market-weighted index of 30 well-established companies listed on the Bombay Stock Exchange.
- S&P CNX 500: India’s first broad-based stock market index, encompassing approximately 96% of total market capitalization.
- MCX: Multi Commodity Exchange – Stock Exchange, India’s third national stock exchange, allowing trading in shares of 1,116 listed companies.
- Other Indices: Includes NIFTY India Consumption, NSE Midcap, among others.
