The total market capitalisation of companies listed on the NSE was $3.7 tn as of the end of October, according to the World Federation of Exchanges, a trade association of publicly regulated stock markets, compared with the Stock Exchange of Hong Kong’s $3.9 tn.
Since that data was produced Indian share prices have surged further as a result of strong earnings and optimistic growth projections, putting it on track to become the world’s seventh largest. Meanwhile, share prices in Hong Kong have fallen as China’s economy cools.
India’s Nifty 50 index of large companies has risen 8.1 per cent over the past month, hitting record highs last week, while Hong Kong’s Hang Seng index fell 6.7 per cent over the same period, dragged lower by a liquidity crisis in the property sector and low investor and consumer confidence.
Over the past decade, India and China stock indices had “moved pretty much hand in hand” as part of an overall emerging markets story, said Abhiram Eleswarapu, head of India equities at BNP Paribas in Hong Kong.
They began diverging in the past three years, said Eleswarapu. “The China stock indices have generally been downward . . . whereas the India one has been going one way, which is up.”
Strong consumption in India is attracting investors, Eleswarapu said, pointing to increased spending on property, luxury and higher-end goods by affluent Indians, as well as growing government capital expenditure on infrastructure.