On Monday, the total market value of the Indian stock market surpassed the Hong Kong stock market for the first time, becoming the fourth largest stock market in the world. Data show that as of Monday's close, the total value of stocks listed on Indian exchanges reached US$4.33 trillion, while the market value of stocks listed on the Hong Kong Exchange was US$4.29 trillion. This means that the Indian stock market surpassed Hong Kong and became the fourth largest stock market in the world.


However, Wall Street institutions such as UBS and Bernstein believe that the Indian stock market is already at a high level, while the Chinese stock market is expected to pick up this year, which means that the Hong Kong stock market is expected to regain its position as the world's fourth largest stock market this year.

Indian stock markets have continued to rise in recent years

The Indian stock market has been booming in recent years due to the rapid growth of retail investors in India and the strong earnings performance of Indian companies. On December 5 last year, the market value of Indian stocks exceeded US$4 trillion for the first time, with about half of the market value achieved in the past four years.

India's growth prospects and policy reforms have made it a darling of global investors. The world's most populous country has positioned itself as the "next China" and hopes to replicate China's rapid economic growth.

"India has all the right factors to further drive growth momentum," said Ashish Gupta, chief investment officer at Axis Mutual Fund in Mumbai.

Overseas funds poured more than $21 billion into Indian stocks in 2023, helping the country's benchmark S&P BSE Sensex rise for the eighth consecutive year.

"There is clear consensus that India represents the best long-term investment opportunity," Goldman Sachs Group Inc. strategists Guillaume Jaisson and Peter Oppenheimer wrote in a report last week.

Hong Kong stocks are expected to overtake this year

While the Indian stock market continues to rise, the Hong Kong stock market has fallen continuously recently. The impact of the COVID-19 epidemic, the real estate industry crisis and geopolitical risks have combined to weaken the attractiveness of the Hong Kong stock market to investors.

At the same time, as the general trend weakens, Hong Kong's new share issuance has slowed down significantly, and Hong Kong is no longer the world's largest IPO market. In 2023, the number of IPOs listed on the Hong Kong stock market and the total amount of funds raised were 73 and HK$46.29 billion respectively, down 9.6% and 53.5% respectively from the same period last year, hitting a ten-year low and falling out of the top three IPO financing markets in the world.

but,Some Wall Street strategists predict that Hong Kong stocks may overtake India this year and regain the status of the world's fourth largest stock market.

Analysts at UBS Group AG expect China's stock market (A-shares and Hong Kong stocks) to perform better than India's stock market in 2024, as valuations are already quite low according to a report in November last year. This shows that China's stock market has huge upside potential once market sentiment changes, while Indian stock market valuations are already at "pretty extreme levels."

A report released by Bernstein earlier this month also showed that the company expected the Chinese stock market to recover and recommended profit-taking on the Indian stock market. The company also believes that Indian stocks are currently too expensive.