India Overtakes Hong Kong, Securing the Position as the Fourth-Largest Stock Market

In a groundbreaking development, the Indian stock market has surged ahead, surpassing Hong Kong to secure its position as the fourth-largest equity market globally. This significant achievement comes as shares listed on Indian exchanges reached a staggering value of USD 4.33 trillion as of the latest data, edging past Hong Kong’s USD 4.29 trillion. According to reliable sources, India’s stock market capitalization surpassed the USD 4 trillion mark for the first time on December 5, 2023, with an impressive growth spurt in the past four years accounting for half of this increase.

India’s Remarkable Performance

Hong Kong

Investors who placed their bets on Indian stocks have reaped substantial rewards over the past year. Despite occasional turbulence, the stock market has delivered handsome monetary dividends in 2023. Notably, key indices such as Sensex and Nifty alone recorded gains of 17-18 percent on a cumulative basis during the course of the year, overshadowing their modest 3-4 percent growth in 2022. Meanwhile, Hong Kong’s benchmark Hang Seng Index suffered a significant cumulative decline of 32-33 percent over the same period, reinforcing India’s rise to prominence.

Factors Driving India’s Success

Several factors have contributed to India’s remarkable performance in the stock market. The outlook for India’s economy appears bright, underpinned by strong forecasts for GDP growth, inflation levels well within manageable limits, and political stability at the central government level. Furthermore, it is noteworthy that central banks worldwide have concluded their monetary policy tightening, further heightening the optimism surrounding India’s economic landscape. These compelling factors have garnered the attention of foreign portfolio investors (FPIs), who have shown an increased interest in Indian stocks. Notably, FPIs have become net buyers in India’s stock market, boosting benchmark stock indices to reach all-time highs.


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India: An Attractive Alternative to China

India, having recently become the world’s most populous country, has emerged as a compelling alternative to China for global investors and companies alike. The country’s stable political setup and consumption-driven economy have positioned it as one of the fastest-growing major nations. As a result of this appealing value proposition, fresh capital from both investors and companies has poured into India, bolstering its stock market rally. This surge coincides with a historic slump in Hong Kong’s market, where influential and innovative Chinese firms are listed.

Hong Kong’s Woes

Various factors have contributed to Hong Kong’s declining appeal as the world’s growth engine. Stringent anti-COVID-19 measures, regulatory crackdowns on corporations, a crisis within the property sector, and geopolitical tensions with the West have collectively diminished China’s allure. Hong Kong’s status as a bustling hub for initial public offerings (IPOs) has also taken a hit, with new listings significantly drying up. In stark contrast, Indian stocks have flourished, capitalizing on the opportunity to attract global investors and companies seeking a stable and growth-oriented market.


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India’s stock market has achieved a groundbreaking feat by surpassing Hong Kong and securing the fourth spot among the world’s largest equity markets. Its robust performance can be attributed to India’s strong economic fundamentals, political stability, and the inflow of funds from foreign portfolio investors. With its stable political setup and consumption-driven economy, India has emerged as an attractive alternative to China, attracting fresh capital and investment. In contrast, Hong Kong has faced significant challenges, including regulatory crackdowns and geopolitical tensions, resulting in a decline in its market appeal. As Indian stocks continue to rally, it is clear that India’s stock market is poised for sustained growth and success in the global arena.

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