India is where China was in mid-2000s. It is at the edge of the runway to take off and will double its GDP every 5 yrs or so. Its biggest challenge though is policy paralysis, while China being a one-party system can chart a 50 yr policy and march towards it, India has a chaotic democracy with dozens of parties and no clear vision. As it happens, the Indian stock market is also one of the most expensive in the world!
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, the total market capitalization of the National Stock Exchange of India was $3.989 trillion versus Hong Kong’s $3.984 trillion, according to data from the World Federation of Exchanges.
India’s Nifty 50 index
reached another record high on Tuesday. It has jumped 16% so far this year and is headed for its eighth straight year of gains. In contrast, Hong Kong’s benchmark Hang Seng index
has plunged 17% year to date.
India has been a standout market this year in the Asia-Pacific region. Increased liquidity, more domestic participation and improving dynamics in the global macro environment in the form of falling U.S. Treasury yields have all boosted the country’s stock markets.