The Indian stock markets in the world

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Ever since electronic trading was first introduced in India in 1992, the Indian stock market has been consistently witnessing explosive growth. You would be surprised to know that the rank of the Indian stock market in the world is currently at the ninth position, and it is all set to move up a few places in the near future.

Although the growth of the Indian share market is undeniable, to get a true picture of where we stand, it is crucial to conduct a comparative analysis with the stock markets of the world. And that’s exactly what we’re going to do in the first chapter of this module of Smart Money. Here’s a quick look at how the Indian share market compares with the world.

The Indian stock markets in the world

To get a good perspective of where our stock markets currently stand, we’ll take up three primary metrics - size, growth rate, and top companies. Also, for our comparison, we’ll be considering five of the biggest stock markets of the world - U.S., U.K, Hong Kong, Japan, and China. Let’s first begin with the size.

1. Size

When we talk of the size of a market, we mean the total market capitalization of all of the companies listed in the respective country’s stock markets. So, when you take the collective market cap of all the companies listed in India, it gives you an idea of how large the Indian stock market is. See how the sizes of the world's top markets compare.

Country 

Total Market Capitalization

United States of America

$45.13 trillion 

China

$11.39 trillion

Hong Kong

$6.76 trillion

Japan

$6.54 trillion

India

$6.16 trillion

United Kingdom

$3.83 trillion 

 As you can see from the above table, the combined market capitalization of both the premier stock exchanges of the country - the NSE and the BSE - beats the stock market of the United Kingdom comfortably. If the meteoric rise of the Indian share market keeps up, we might even comfortably cross Japan and Hong Kong markets in the coming years.

 

2. Growth rate

The growth rate gives us a better idea of just how much the Indian stock market has grown over the years. It represents the percentage of growth in total market capitalization that the Indian share market has witnessed. For our comparison, we’ll be taking a look at the one year growth rate (2019 to 2020). Check it out here.

Stock Exchange 

Country

Percentage of growth 

NYSE

U.S.A

7.2%

Shanghai Stock Exchange

China

36.6%

Japan Exchange Group

Japan

8.5%

Hong Kong Exchanges and Clearing

Hong Kong

25.1%

National Stock Exchange 

India

18%

London Stock Exchange 

United Kingdom

-3.3%

In just one year, from 2019 to 2020, the total market capitalization of one of the premier stock exchanges of India - the National Stock Exchange - has grown by about 18%, making it one of the fastest growing exchanges in the world. This level of growth can be attributed to an increase in the retail participation that the Indian share market has been witnessing over the years.

3. Top companies

And finally, here’s a look at the top companies and their market capitalization of the major stock markets of the world including the Indian stock market. This can give you a better idea of where Indian listed companies stand in comparison with those of the world.

Stock Market

Top Companies

United States of America

  1. Apple
  2. Microsoft
  3. Google

China

  1. Kweichow Moutai
  2. Industrial and Commercial Bank of China
  3. Contemporary Amper

Hong Kong

  1. Tencent
  2. Alibaba
  3. ICBC

Japan

  1. Toyota Motor Corp
  2. Sony Group Corp
  3. Keyence Corp

India

  1. Reliance Industries
  2. Tata Consultancy Services
  3. HDFC Bank

United Kingdom

  1. Tencent Holdings Limited
  2. Roche Holding
  3. Adobe Systems

As you can see from the above, Reliance Industries, TCS, and HDFC Bank are the top companies in the Indian stock market in terms of market capitalization. Although they may be a bit behind giants like Apple, Alibaba, and Toyota, the future of Indian companies looks bright from where we stand today.

Wrapping up

With both the premier stock exchanges of the country - Nifty 50 and Sensex- poised to touch greater heights in the years to come, the Indian stock market rank in the world is surely to improve in the future. Now that we’ve seen how the Indian stock market compares with that of the world, it is time to look at our economy and trace its growth, which we will be doing in the forthcoming chapter.

A quick recap

  • The combined market capitalization of both the premier stock exchanges of the country - the NSE and the BSE - beats the stock market of the United Kingdom comfortably. 
  • In just one year, from 2019 to 2020, the total market capitalization of one of the premier stock exchanges of India - the National Stock Exchange - has grown by about 18%, making it one of the fastest growing exchanges in the world. 
  • Reliance Industries, TCS, and HDFC Bank are the top companies in the Indian stock market in terms of market capitalization. Although they may be a bit behind giants like Apple, Alibaba, and Toyota, the future of Indian companies looks bright from where we stand today.

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FAQ'S

Yes, there are many ways in which Indians can start investing in international stocks. You can open an Overseas Trading Account with a domestic broker, or a foreign trading account with a foreign broker who has a branch in India. Alternatively, you can also invest in international stocks through mutual funds. Many mutual funds invest directly in international stocks. This is a cost-effective way to invest in international equity.
The National Stock Exchange is the largest stock exchange in India. The exchange has a total market capitalization of over $3 trillion, making it the 10th largest stock exchange in the world, as of May 2021.
No, the BSE is the oldest stock exchange in Asia. It was established in 1875, and has been in operation ever since.
A stock market is a place where regular operations such as buying, selling, and issuance of publicly traded company shares take place. Such financial transactions happen on structured official exchanges or over-the-counter (OTC) marketplaces that are governed by a set of rules. In a country or region, there may be many stock trading venues that allow transactions in stocks and other securities.
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