Largest share Market and share market indices

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Largest share Market and share market indices

India share market 4th largest globally:

India’s stock market has overtaken Hong Kong’s to rank as fourth-biggest equity market globally for the first time.

What is market capitalization?

It is the value of all listed companies on share market on a particular day. It indicates the rising confidence & belief of investors in growth being sustainable.

Indian stock market has all along been 5th largest by capitalization but because of fall of valuations in Hong Kong and rise in share indices in India. India has  leapfrogged Hong Kong for now and is expected to maintain this position because of slowing growth in china on which Hong Kong depends.


Factors on which market capitalization depends?

  • Demand and supply
  • Exp[orts
  • Profitability
  • Tax policies


Current position of various countries on market capitalization:

United States

-Market cap: $47,784 billion
-YTD Change: 16.37%
-Share in World m-cap now: 44.74%
-M-cap to GDP: 188%



-Market cap: $9,736 billion
-YTD Change: -3.96%
-Share in World m-cap now: 9.12%
-M-cap to GDP: 54%



-Market cap: $6,021 billion
-YTD Change: 10.21%
-Share in World m-cap now: 5.64%
-M-cap to GDP: 142%



-Market cap: $4,021 billion
-YTD Change: 8.2 per cent YoY
-Share in World m-cap now: 4%
-M-cap to GDP: 129%


Share market indices globally

Global indices are a benchmark to evaluate the strength or weakness in the overall market Normally, a sample of highly liquid and valuable stocks from the universe of listed stocks is selected and made into an index. The weighted movement of these sets of stocks or portfolios of stocks constitutes the movement of global indices. So, if global indices are moving up, that means the markets are strong, and if global indices are moving lower, that means global markets are weak. In this section, we look at global indices and also at the global indices market.

Various global stock indices

Major Global Indices

Here are some of the most popular and tracked indices in the world. These are the general indices that give an overall view of the market and also economic robustness.

Index Name Country
Global Dow Realtime USD United States
S&P 500 Index United States
Hang Seng Index Hong Kong
S&P BSE Sensex Index India
NIKKEI 225 Index Japan
FTSE 100 London
KOSPI Composite Index South Korea
FTSE 100 Index United Kingdom



How do Global Indices Affect the Indian Stock Market?

Do global indices affect Indian indices at all? You would find that it rarely happens that the Dow and NASDAQ are 2% up and Nifty is 2% down. It also does not happen the other way round. There is a clear correlation between the global indices and the Indian indices. The question is why does this correlation come about in the case of global indices? There are several reasons the global indices impact Indian indices.

Markets are more integrated  - Post globalization, the Indian stock market is more integrated with the global market and its effects are visible. In a way, the movement in Indian indices tends to be in sympathy with the global trend.

Quite often, the foreign portfolio investors are common across markets and their decisions to buy or sell tend to be synchronized. So, a big loss in NASDAQ may force them to take profits out of other markets too.

An extension of the previous argument is that such FPI decisions impact the flow of foreign capital into India, which has an oversized impact on the Indian indices and also the Indian currency overall.

Exports are another important reason. For example, heavyweights like banks tend to react to Fed decisions on tightening and loosening. Indian oil companies react to global Brent Crude prices and the impact is uniform globally. Thirdly, the sectors like IT and auto ancillaries rely heavily on US investments and US corporate spending. Thus, the relationship between Indian indices and global indices become very close.

Finally, there is an emerging market link. Large index funds and ETFs globally look at emerging markets like India, Taiwan, Korea, Brazil, Indonesia, etc as an asset class. They base their index investment decisions, normally on the weights assigned by the MSCI EM Indices. That is why indices in emerging markets also tend to get synchronized.

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