Indian stock markets overtake Hong Kong: financial expert analyzes global capital market

Indian stock markets overtake Hong Kong: financial expert analyzes global capital market

According to a report by www.tagesschau.de,

In recent years, India has increasingly established itself as an attractive alternative to China among emerging economies. The subcontinent has now overtaken Hong Kong in terms of stock market value. But China remains in second place. While China's stock markets have been on the decline for over three years, the Indian capital market is booming. At the start of the week, the Indian stock market overtook the Hong Kong stock exchange for the first time and is now in fourth place, according to data from the Bloomberg news agency. Indian bourses as a whole have a market capitalization of $4.33 trillion, while Hong Kong has fallen to $4.29 trillion. The first places are occupied by the USA, mainland China with the markets of Shanghai and Shenzhen and Japan. In the past four years, the subcontinent's market capitalization has roughly doubled.

High growth and relatively stable situation
Given the emerging market's growth prospects, India has become the darling of investors. A growing number of affluent consumers and rising corporate profits are boosting prices. Above all, the prospects of political continuity after the 2024 parliamentary elections and continued strong economic growth had an encouraging effect. India is already in fifth place in the ranking of national economies and even third in terms of purchasing power parity.

Beijing wants to support tumbling stock markets
In contrast, the Chinese markets are suffering from ongoing capital outflows due to the strict Covid policy, government intervention in the corporate sector, the crisis in the real estate market and political tensions with the West. The government in Beijing now wants to support the stock markets with around $278 billion.

Analysis and implications
The rise of the Indian stock market and the overhaul of Hong Kong show the attractiveness of India's emerging market. With its market capitalization doubling in the last four years, India is attracting more and more international capital. This is also reflected in the investment decisions of investors, who are increasingly investing in Indian companies due to the growth prospects and political stability. The Chinese market, on the other hand, is suffering from ongoing capital outflows due to the country's political and economic problems. The Chinese government's planned measures to support the stock markets could provide stability in the short term, but could affect the attractiveness of the Chinese market in the long term.

However, it remains to be seen how capital flows will shift in the future and whether the Indian market's rise will continue. A possible countermovement of international capital towards China could influence developments. It is important to keep an eye on these developments and analyze possible impacts on the financial industry.