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India’s Stock Market Surpasses Britain and France

Ranks Fourth in the World

India’s stock market has experienced a significant surge in market value, surpassing that of Britain and France, and securing the fourth position globally.

According to recent data from QUICK FactSet, the total market value of Indian stock markets reached an impressive $3.4 trillion as of last Friday, reflecting a 13% increase since March 31. India now follows the United States, China, and Japan, representing 3.3% of the total market value of major global stock markets.

The pursuit of foreign capital has played a crucial role in driving India’s stock market growth. Yosuke Mimaki, an expert at Mitsubishi UFJ Asset Management, noted that investors, seeking alternatives to U.S. technology stocks and skeptical about China’s economic recovery pace, have turned to India as a promising destination for investment based on its growth potential.

India’s primary stock index, the Sensex, hit record intraday highs on Friday and Monday, although it closed lower on Monday due to profit-taking activities. The blue-chip Nifty 50 index also reached a new peak on Friday.

While China’s economic slowdown

Impacted stock markets across Asia, Indian stocks have remained resilient. In contrast, Indonesian stocks have fallen by 2% since the end of March, and Thai and Hong Kong stocks have experienced declines of 3% and 2% respectively.

Strong corporate profits have further bolstered the performance of Indian stocks. Major Indian automakers, such as Aeolus Suzuki and Tata Motors, have reported record revenues and net profits for the year ending in May. Despite semiconductor shortages, Aeolus Suzuki experienced a surge in demand, leading to a 16% increase in its stock since March 31.

Tata Motors witnessed a remarkable rally of over 30% during the same period due to robust earnings. The rising income levels of Indian consumers have contributed to increased sales of premium cars, adding to the positive outlook for the market.

In addition to strong corporate performance, multinational corporations have recognized the potential of the Indian market both as a consumer base and as a destination for supply chain restructuring.

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With many companies seeking to relocate from mainland China, India has emerged as a preferred choice. Apple, for example, opened its first directly-operated store in India in April, while its supplier Hon Hai expanded its manufacturing presence in the country.

The influx of direct investments has further enhanced India’s attractiveness to global capital. According to the National Securities Depository of India, foreign investors significantly overbought the Indian stock market in March.

With the scale of overbuying increasing to INR 438.3 billion (approximately $5.35 billion) in May—almost four times that of April. As of the latest data available, the overbought amount in June stood at INR 164 billion.

Investors, cognizant of economic and geopolitical risks, have displayed a clear inclination towards avoiding an overweight exposure to Chinese equities, instead turning to Indian equities as a safer alternative.

India’s ascent to the fourth position in the global stock market hierarchy underscores its growing prominence as an attractive investment destination.

With robust corporate performance, increasing consumer purchasing power, and the influx of foreign capital, India’s stock market is poised for continued growth and investor interest in the foreseeable future.

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