With stocks rallying on the back of strong fund flows, India surpassed Canada to become the eighth-biggest equity market in the world on Thursday.
With stocks rallying on the back of strong fund flows, India surpassed Canada to become the eighth-biggest equity market in the world on Thursday. It had secured the ninth position in September 2014. India’s market cap has swelled by 46.4% in 2017, faster than most of its emerging market peers. At the same time, the market capitalisation of Canada has increased by just 14.7% this year, even China and Hong Kong have seen slower growth of 17.1% and 32.5%, respectively. The benchmark Sensex rallied 24.5% this year, so far, against 4.5% gain clocked by the Canadian TSX Composite Index. The gains were limited to single digits in the Canadian market as 104 firms in the index of 249 stocks witnessed sharp declines. In contrast only 7 of the stocks in the Sensex declined moderately.
On Thursday, the market capitalisation of India stood at $2.29 trillion, $18 billion more than that of Canada, Bloomberg data shows. The Rupee has strengthened by 5.36% on a year-to-date basis, and this has supported India’s rise in the market cap ranking. Foreign portfolio investors (FPIs) have so far infused a net $8.9 billion into equities this year, whereas domestic institutional investors funnelled in another $12.4 billion. In November alone, FPIs purchased equities worth over $3 billion–the highest monthly inflow in eight months.
They had sold equities worth $3.4 billion in August and September, but the impact was offset by purchases by domestic institutional investors of $5.6 billion in the same period. The surge in the country’s market cap has also been supplemented by a number of initial public offers this year. Over 30 companies raised close to a record `66,000 crore from the primary market in 2017. Interestingly, despite its rank, India contributes only 2.4% of the world market capitalisation of $95 trillion.