The Indian market, which recently entered the $2 trillion market cap club last month, thanks to a gush of local as well as global liquidity, will soon join the $4 trillion club in the next 7-10 years, suggest experts.
The current mark cap of the Indian market is roughly $2 trillion which is still more than countries like Brazil, Indonesia, Taiwan, Korea, and Russia.
The market raced to fresh record highs in the last 5 months courtesy reform push by the Modi-led government, expectations of higher earnings for India Inc., rebound in economic growth and stable political environment.
India’s share in the world market cap is at 2.6 percent which is above at its long-term average of 2.4 percent, Motilal Oswal said in a report. “Over last 12 months, world market cap has increased 17.6%; India’s market cap has increased 33 percent,” it said.
Market cap is a function of earnings growth, liquidity and interest rates.
For the Calendar year 17 YTD, India market rose nearly 17 percent, followed by MSCI EM which also gained over 17 percent.
Market Cap likely to touch $4-5 trillion
The rally in Indian market is far from over and analysts are predicting a print of $4-5 trillion market cap in the next 7-10 years which would make India above UK which currently stands at $3.5 trillion.