Alex Rankine Markets editor
While most investors focus on booming US stocks, “there is an even more intense bull market under way in India”, says Ruchir Sharma in the Financial Times. Unlike America’s narrowly focused tech boom, India’s run has been a “broad-based classic”, with gains spread across sectors and company sizes. Where India does resemble the US is the key role played by domestic retail investors. Rising incomes are fostering an “equity culture” in the world’s most populous nation. The amount of money Indians hold in targeted investment plans has tripled this decade to nearly $110bn. While the US and UK equity markets suffer de-listings, in India the number of publicly listed firms has nearly quintupled in two decades.
By one measure, the number of nationwide stock-trading accounts nearly tripled between 2019 and 2023 to 140 million – still a small fraction of a population of 1.4 billion, says The Economist. Equities still represent only 4.7% of Indian household wealth, behind property (51%) and gold (16%). But the equity share has more than doubled in a decade, marking a “sea change” for “middle-class India’s culture of saving”, which until recently was centred on gold (see page 5). The retail boom helped India’s stockmarket surpass Hong Kong as the world’s fourth-largest earlier this year. As with all booms, there are signs of excesses. Market regulators fret about social-media “finfluencers” pumping up “unrealistic expectations” for returns, while eager retail investors pile into less-liquid small caps.
It’s not just Indian investors getting excited, says Bastien Bouchaud in Les Echos. Foreigners poured more than $30bn into Indian stocks last year as they sought an alternative to China. The “cherry on top” is that the country offers diversification benefits.
