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

XRP jumps 12% to $2.86 as whales drive...

January 15, 2025

Affirm stock price forecast: set to enter beast...

December 7, 2024

Kenya’s Safaricom in talks with Starlink for satellite...

September 28, 2024

Expedia’s cost controls offer hope, but analysts see...

May 10, 2025

Fed holds interest rates but keeps door open...

August 2, 2024

Up 365% in 2024, what next for the...

December 12, 2024

Bitcoin approaches all-time high after surpassing $65,000

March 6, 2024

Power Solutions stock price analysis: key targets ahead...

March 20, 2025

Capri Holdings stock price is heading towards a...

October 31, 2024

JPMorgan Chase is opening more small-town branches in...

August 7, 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

    • GMS stock jumps 29% on takeover interest from Home Depot, QXO, analysts raise PTs

      June 22, 2025
    • Japan’s rice price surge: what’s driving it and why it could spark a political crisis

      June 22, 2025
    • BofA raises STOXX 600 target amid resilient global growth, warns on Mideast risks

      June 22, 2025
    • Palantir co-founder: US must prevent Iranian nukes

      June 22, 2025
    • Fed governor Waller advocates for July rate cut amid tariff, labor market outlook

      June 21, 2025

    Categories

    • Business (3,199)
    • Investing (2,531)
    • Latest News (2,000)
    • 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