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

Europe markets open: stocks to fall; Trump hits...

August 1, 2025

S&P 500 Index: Time to sell the SPY...

May 2, 2025

UK’s digital banks face divergent fortunes: Starling stumbles,...

June 1, 2025

Sunrun stock price crashed: will the US Senate...

May 25, 2025

BSE Sensex, Nifty50 on October 28: Shriram Finance,...

October 28, 2024

Long BMRC: Bank of Marin Breaks Out on...

January 28, 2025

McKinsey halts generative AI consultancy in China: what...

July 23, 2025

These two stocks reporting earnings soon typically beat...

October 20, 2024

Signet stock price surges, but a risky pattern...

March 20, 2025

Why meme coins promoted on X are a...

November 26, 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

    • FBI raid on John Bolton’s home in Washington linked to classified documents

      August 25, 2025
    • Argentine senate deals blow to Milei’s austerity agenda with university budget boost

      August 25, 2025
    • Jackson Hole Symposium: what Powell said about economic effects of Trump’s tariffs

      August 25, 2025
    • At Jackson Hole, Fed Chair Powell signals possible cuts while warning of uncertainty

      August 25, 2025
    • Trump threatens to fire Fed Governor Lisa Cook amid mortgage fraud allegations

      August 25, 2025

    Categories

    • Business (3,753)
    • Investing (2,776)
    • Latest News (2,048)
    • 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