The Indian stock market has achieved a historic milestone, becoming the world's fastest-growing stock market. Surpassing major markets like the US and China, India has secured the top position.
Stock Market: Since March 2025, the rapid growth of the Indian stock market has not only enriched domestic investors but also established India as a new leader on the global stock market stage. Outperforming giants like the US and China, the Indian stock market has registered a market capitalization increase of over $1 trillion – an unprecedented achievement. India has now become the world's fifth-largest stock market.
Exceptional Performance from March to June 2025
Data from March 2025 to the present shows that the total market capitalization of companies listed in India has reached $5.33 trillion. This figure represents an increase of over 21% compared to March. Interestingly, during this period, the growth of large markets like the US and China was minimal.
While the US registered only a 2.4% increase, China saw a growth of just 2.7%. In contrast, India's economy and corporate sector combined to instill such confidence in investors that the market experienced a remarkable surge.
India's Impact on Global Rankings
During this period, India not only outperformed Asian markets but also several European economies. After India, Germany showed the best performance, with a 14% increase in the market capitalization of its companies.
Top 10 Global Markets: Market Cap Growth (March-June 2025)
- India - 21.2%
- Germany - 14%
- Canada - 11%
- Hong Kong - 9.3%
- Japan - 8.2%
- UK - 8%
- France - 3.9%
- Taiwan - 3.2%
- China - 2.7%
- USA - 2.4%
Sensex-Nifty's Rise and Investors' Gains
Indian benchmark indices like the Sensex and Nifty have recorded growth of 12.5% and 13.5% respectively since March. However, the real gains were in the midcap and smallcap segments, where investors received returns of up to 20.7% and 26% respectively. This clearly demonstrates that investors have shown confidence not only in large companies but also in small and medium-sized companies, broadening the market's base.
Reasons for this Surge?
- Political Stability: A clear mandate in the recent general elections and policy stability have reassured investors.
- Progressive Budget: The progressive budget announced by the central government boosted investment in the infrastructure and manufacturing sectors.
- Regulatory Reforms: SEBI's efforts to increase liquidity and transparency have been successful.
- Retail Investor Participation: A significant increase in SIPs and demat accounts has been observed.
While this tremendous market surge presents a joyful opportunity for investors, experts believe that valuations have become expensive. Shares of many companies are overvalued based on their P/E ratios. Therefore, new investors are advised to exercise caution.
