Welcome to the club: Indian market is now the fifth most valued stock market
For the first time ever, India’s equity market has made into world’s top five most valued stock markets in terms of market capitalization. With this it has beaten stock markets of United Kingdom, Canada and Saudi Arabia. India’s total market cap thus stands strong at $3.21 trillion. UK’s is at $3.19 trillion, Saudi Arabia at $3.18 trillion while Canada is too is at $3.18 trillion.
India follows the big sharks, with United States leading the chart at $47.32 trillion, China at $11.52 trillion, Japan following at number 3 at $6 trillion and Hong Kong at $5.55 trillion.
Despite a 7.4 per cent drop in market cap, India has climbed up two positions this year. At start of the year, UK and France were at fifth and sixth positions respectively. Apart from Saudi Arabia, all top global stock markets have witnessed huge slump due to Russia and Ukraine tensions. Since December, US has lost around $6.6 trillion, China $1.48 trillion, Japan $622 billion and Hong Kong has lost $524.31 billion. India has lost comparatively less since the start of the year with losses recorded $257.35 billion.
“Recovery in markets over the past couple of days is obviously aided by positive sentiments about election results as well as talk that the war in Ukraine seems to be coming to some sort of closure. There have been signals of reconciliation between Russia and Ukraine, and their foreign ministers are expected to meet again today,” said Nilesh Shah, managing director, Kotak Mahindra Asset Management Company.
Meanwhile, Saudi Arabia’s stock market has climbed three places from 10th to 7th. The country’s biggest firm Aramco has gained substantially from the surge in oil prices this year.
Indian equity markets have been majorly impacted by geopolitical crisis of Russia and Ukraine leading to sustained selling by foreign institutional investors (FII). “For the Indian stock markets, the real war is the continuous FII selling, which on a daily basis is in the region of $1 billion for the past few days,” said Raamdeo Agrawal, co-founder and joint managing director of Motilal Oswal Financial Services. “The FIIs have exited India for now, but they will have a very painful entry whenever they decide to come back to Indian equities,” Agrawal added.