In less than three years, the Indian stock market has surged by over 1 trillion USD, pushing the total market capitalization to 4 trillion USD.
This milestone was achieved on December 5th, narrowing the gap between the Indian stock market, the world’s fifth-largest, and the Hong Kong Stock Exchange (China). In recent years, the Indian stock market has consistently been among the best-performing markets in the region and in emerging economies. This also marks the highest market capitalization ever recorded for the Indian stock market.
In the current year alone, the Indian stock market has seen a 13% increase and is likely to mark the eighth consecutive year of growth.
The market capitalization of the Indian stock market is now only about 700 million USD less than that of the Hong Kong Stock Exchange, China.
Not long ago, India surpassed China to become the world’s most populous country. Currently, India is also one of the fastest-growing economies globally. With political stability and the robust growth potential of the domestic market, India has become a magnet for investment capital and an attractive destination for industrial production.
Foreign investors have net-purchased over 15 billion USD worth of stocks on the Indian stock market this year. Domestic investment funds have also poured in more than 20 billion USD into the market.
However, there are opinions suggesting that the Indian stock market is heating up. India’s S&P BSE Sensex Index has a P/E ratio of 20, slightly higher than the five-year average and notably surpassing the global average P/E of 16. Additionally, there are signs indicating that some investors are taking precautionary measures to mitigate risks in their investments.
Investors are closely monitoring economic indicators amidst concerns of overheating. The Indian stock market’s unprecedented growth demands a delicate balance between optimism and risk management, especially with signs of investors adopting precautionary measures to navigate potential challenges in the coming months.
Reference: Bloomberg
By. Pham Thanh Bien
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