At the end of November, NSE of India was valued at $3.989 trillion versus Hong Kong’s $3.984 trillion
In a sign of growing confidence in the nation’s economic future, India’s stock market has surpassed Hong Kong’s to claim the seventh-largest spot globally. As of November’s end, the National Stock Exchange of India boasted a market capitalization of $3.989 trillion, edging out Hong Kong’s $3.984 trillion, according to data from the World Federation of Exchanges.
This milestone coincides with India’s Nifty 50 index reaching another record high on Tuesday, fueled by an impressive 16% jump this year and its eighth consecutive year of gains. In stark contrast, Hong Kong’s Hang Seng index has plummeted 17% year-to-date, highlighting the diverging fortunes of the two Asian markets.
This shift underlines the increasing optimism surrounding India’s economic potential, driven by factors such as a young and growing population, a burgeoning tech sector, and ongoing government reforms. While challenges remain, India’s stock market ascent suggests a growing belief in the nation’s ability to navigate the global economic landscape and solidify its position as a major financial player.
Indian Markets Soar to New Heights, Defying Global Headwinds
Indian equities scaled new peaks, defying the turbulence plaguing other global markets. The benchmark Sensex touched an all-time high of 70,058 points before settling at 69,929, a gain of 103 points. The Nifty index, on the National Stock Exchange, also crossed the 21,000 mark for the second consecutive session but closed at 20,997, up 28 points.
The Sensex’s journey from 60,000 to 70,000 points took 549 sessions, slower than the blistering pace of its previous 10,000-point climb from 50,000 to 60,000, achieved in just 166 days. This time, however, strong domestic factors propelled the market forward, even as most global markets grappled with challenges like multi-year high inflation, aggressive central bank rate hikes, geopolitical tensions, and economic uncertainty.
India’s resilience stands in stark contrast to the global scenario. While other markets reeled under the weight of these headwinds, domestic factors like robust growth projections, healthy assembly election results, and improving inflation outlook provided tailwinds for Indian equities.
This divergence highlights India’s growing economic strength and investor confidence in its future prospects.
Hong Kong lingers behind
Last week, Moody’s, a prominent credit rating agency, further fueled these concerns by downgrading its outlook for Hong Kong from stable to negative. This decision was attributed to the city’s deep financial, political, institutional, and economic links with mainland China. Notably, this downgrade came shortly after Moody’s also revised its outlook for China’s government credit rating from negative to stable.
With the Hang Seng facing its fourth year of decline and Moody’s casting a negative shadow, uncertainty hangs heavy over Hong Kong’s stock market. The future trajectory of the index will largely depend on how effectively the city addresses its economic and political challenges, as well as the broader geopolitical landscape surrounding China.
