Market Sell-Off Impact: India’s share in global market cap below 3% for the first time in two years

With broad-based selling showing no immediate signs of abating, Indian equities have together lost over $1 trillion in market capitalisation since beginning of the year. The erosion in market capitalisations has resulted in the country’s dominance among global markets to fall the lowest level in two years.According to Bloomberg data, India’s share in the global equity market has dropped to 2.9%, down from nearly 4% at the start of the year. The combined market capitalisation of listed Indian companies has declined by 23.3% since January, which currently stands at $3.8 trillion.

While US equities dominate the global market, contributing nearly 50% to the overall share, China comes in a distant second with an 8.2% share. Japan and Hong Kong follow, contributing 5.2% and 4.6%, respectively.
Interestingly, countries like Canada, the United Kingdom, and France have increased their share, with each now accounting for approximately 2.6% of the global equity market.Among the top ten global markets, India has witnessed the sharpest decline so far this year, with the Nifty 50 plunging nearly 9% in US dollar terms. In contrast, the UK’s FTSE 100 and France’s CAC 40 have rallied 10% and 12%, respectively during the same period.

Also read: FPIs pull out $25 billion in five months as Nifty50 faces longest losing streak in 29 years

Heavy selling from Foreign Portfolio Investors (FPIs) has been the big factor behind the Nifty 50 being on course for a record 10th consecutive day of declines. Overseas investors have offloaded Indian shares worth nearly $14 billion since January, pushing the five-month total past $25 billion.

However, despite a 16% decline from its September highs, the Nifty 50 still trades at 18.1 times its one-year forward earnings. In comparison, South Korea’s Kospi trades at 8.8 times, Taiwan’s TAIEX at 15.6 times, and the Shanghai Composite at 12 times.

On Tuesday (March 4), the Nifty 50 was trading at 22,070.65, down nearly 50 points from the previous close. The index has lost 4% during its ten-day losing streak, bringing its total decline for the year to 7%. Meanwhile, the Nifty Midcap Index has plunged 16%, while the Nifty Smallcap Index has suffered a sharp 21% decline since January this year.