American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

India’s market cap falls below $4 trillion: what’s behind the slump?

by admin February 14, 2025
February 14, 2025
India’s market cap falls below $4 trillion: what’s behind the slump?

India’s stock market has suffered its steepest decline in over a year, with total market capitalisation slipping below $4 trillion for the first time since December 2023.

A combination of a weakening rupee, foreign capital flight, and stretched valuations has triggered a selloff that wiped out over $1 trillion in equity value.

The country’s benchmark indices, Sensex and Nifty, have declined 2.6 percent so far this year, while broader indices have faced an even sharper downturn.

The BSE MidCap index has tumbled more than 12 percent, and the SmallCap index has lost over 15 percent, signalling deeper concerns about market breadth.

Foreign institutional investors have pulled more than $10 billion from Indian equities in 2025, raising fears about the sustainability of India’s bull run.

India lags behind global markets

India’s 18.33 percent decline in total market capitalisation is the sharpest among global markets in 2025.

Zimbabwe follows closely with an 18.3 percent drop, while Iceland ranks third with an 18 percent decline, according to Bloomberg data.

Major global indices have largely outperformed India. The US, which remains the world’s largest stock market, has recorded a 3 percent increase in market capitalisation this year.

China and Japan have posted gains of 2.2 percent each, while markets in Hong Kong, Canada, the UK, and France have registered increases of 1.2 percent, 7.2 percent, 7.1 percent, and 9.9 percent, respectively.

India’s market struggles come amid concerns over economic growth, earnings uncertainty, and a volatile political landscape.

The Indian rupee has weakened by nearly 1.5 percent against the US dollar this year, making it the second-worst-performing currency in Asia after the Indonesian rupiah.

This depreciation has made Indian assets less attractive to foreign investors, further exacerbating the selloff.

Mid and small caps hit hardest

While India’s stock market had previously been a magnet for investors seeking high-growth opportunities, concerns over stretched valuations are now weighing on sentiment.

At the IFA Galaxy conference, ICICI Pru AMC’s CIO, S Naren, warned against systematic investment plans (SIPs) in mid- and small-cap funds, citing high valuations and market volatility.

His comments sparked a broader discussion among market participants about whether India’s equity market remains an attractive bet for long-term investors.

Notably, renowned valuation expert Aswath Damodaran has also raised concerns about India’s expensive market.

Despite India’s strong GDP growth, he has pointed out that its equities remain among the most overvalued globally.

Meanwhile, China’s Shanghai Composite has outperformed the Sensex, further fuelling debate about whether India’s premium valuations are justified.

Global risks pressure equities

Beyond domestic factors, global economic uncertainties are also contributing to India’s market downturn.

The possibility of a tariff war under a second Trump administration has created additional nervousness among investors.

With India being a major exporter of services and goods to the US, any shift in trade policy could have a significant impact on corporate earnings.

Bloomberg’s methodology for calculating market capitalisation excludes ETFs and ADRs, focusing only on actively traded primary securities on exchanges.

This approach aims to prevent double counting, though it results in lower aggregate values compared to other sources.

The post India’s market cap falls below $4 trillion: what’s behind the slump? appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Elon Musk presents Indian PM Modi with a Starship heatshield tile from space
next post
HSBC share price forecast ahead of earnings: buy or sell?

Related Posts

Chick-fil-A announces shift from ‘no antibiotics’ in chicken...

March 28, 2024

SoundHound stock price analysis: Is SOUN a good...

November 6, 2024

Short VIAV: Viavi Solutions Faces Bearish Reversal After...

February 3, 2025

Europe market open: Stoxx 600 slips 0.8% as...

April 16, 2025

PepeX presale raises $1 million as AI launchpad...

April 30, 2025

OpenAI announces a search engine called SearchGPT; Alphabet...

July 27, 2024

July 4 travel hitting a record thanks to...

July 5, 2024

Europe markets open: Stoxx 600 points up; focus...

May 9, 2025

Collapse of fintech firm with 10M users leaves...

May 25, 2024

These 2 European semiconductor stocks are Bernstein’s top...

December 28, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • How Donald Trump’s immigration crackdown may tank the labor market

      August 4, 2025
    • Trump’s tariff threat looms over India’s Russian oil deals

      August 4, 2025
    • Trump moves nuclear submarines near Russia: what triggered the move and what’s ahead

      August 3, 2025
    • BOE rate cuts offer little relief as UK households face mounting financial strain

      August 3, 2025
    • Retail investors shift focus to Europe as US valuations stretch

      August 3, 2025

    Categories

    • Business (3,563)
    • Investing (2,695)
    • Latest News (2,031)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved