India’s stock market value has overtaken Hong Kong’s to become the seventh largest in the world as optimism about the country’s economic prospects grows.
As of the end of November 2023, the absolute market capitalization of the National Stock Exchange of India was $3.989 trillion as against Hong Kong’s $3.984 trillion, as indicated by data from the World Federation of Exchanges.
India’s Nifty 50 index reached another record high on Tuesday December 12. It has jumped 16% up to this point this year and is set out toward its eighth consecutive year of gains. Conversely, Hong Kong’s benchmark Hang Seng record has plunged 17% year to date.
India has been an exceptional market this year in the Asia-Pacific region. The country’s stock markets have benefited from increased liquidity, increased domestic participation, and improved dynamics in the global macro environment as a result of falling U.S. Treasury yields.
The world’s most populous country additionally 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 in a client note.
According to HSBC, the best sectors for next year are banks, the energy industry, and health care.
Sectors, for example, automobiles, retailers, real estate and telecoms are additionally generally strategically situated for 2024, while fast-moving consumer goods, utilities and synthetic compounds are among those HSBC arranged as unfavourable.
Hong Kong’s Hang Seng Index is ready to indent a fourth year of declines and is the most horrendously bad performer among significant Asia-Pacific value markets.
Moody’s cut Hong Kong’s outlook from stable to negative last week because of the financial, political, institutional, and economic ties the city has to mainland China. That minimization came not long after Moody’s decreased its standpoint for China’s administration FICO assessments to negative to stable.
Toward the beginning of November, the Hong Kong government said it anticipates that the economy would grow 3.2% in 2023, managing its Gross domestic product growth viewpoint from the 4% to 5% forecast in August.
The city’s government has warned that increasing geopolitical tensions and tight financial conditions continue to weigh on investments, exports of goods and consumption sentiment. Consumer confidence has also suffered in Hong Kong.
“Hong Kong’s economy is poised for a soft landing in 2024 as annual real GDP growth moderates to around 2% from 2023’s 3.5%,” said economists at DBS.
“Central to this recovery is mainland tourism revival, fortifying retail and catering sectors.”
China has set a growth target of 5% for 2023. Its third quarter-GDP came in at 4.9%, lifting hopes that the world’s second-largest economy will meet or even exceed expectations.