India Surpasses Hong Kong, Ranks 7th in Global Stock Markets
India's stock market has surpassed Hong Kong's to claim the seventh spot in global rankings, fueled by increasing optimism about the country's economic outlook. By the end of November, the National Stock Exchange of India boasted a total market capitalization of $3.989 trillion, outpacing Hong Kong's $3.984 trillion, as reported by the World Federation of Exchanges.
The Nifty 50 index in India has achieved yet another all-time high, marking a nearly 16% surge year-to-date and signaling its eighth consecutive year of positive returns. In contrast, Hong Kong's Hang Seng index has experienced an 18% decline during the same period. India stands out as a notable performer in the Asia-Pacific region this year, benefiting from heightened liquidity, increased domestic participation, and positive shifts in the global macro environment, particularly the decline in U.S. Treasury yields.
The world’s most populous country also heads into general elections next year, which analysts predict could be another victory for the ruling nationalist Bharatiya Janata Party. "For the general election, opinion polls and recent state elections indicate that the incumbent BJP-led government may secure a decisive win, which could trigger a bull run in the first three to four months of the year on expectations of policy continuity", HSBC strategists said.
HSBC has identified banks, healthcare, and energy as the most favorable sectors for the upcoming year. Sectors including autos, retailers, real estate, and telecoms are also reasonably well-positioned for 2024, whereas fast-moving consumer goods, utilities, and chemicals fall into the unfavorable category according to HSBC. Meanwhile, Hong Kong's Hang Seng index is on track for its fourth consecutive year of declines and stands as the weakest performer among major Asia-Pacific equity markets.
