UK Overtakes India as the World’s Sixth-Biggest Equity Market: The United Kingdom’s equity market has overtaken India’s to become the world’s sixth-largest for the first time in almost nine months, as a weaker pound makes heavyweight exporters trading in London more appealing. The combined market capitalization of primary listings in the UK, excluding ETFs and ADRs, reached about $3.11 trillion on Tuesday, which is approximately $5.1 billion higher than their Indian counterparts. James Athey, investment director at Abrdn, believes that investors are seeing a “deep value opportunity” in the UK following the decline in sterling and with less experimental government policy. Additionally, the FTSE 100’s composition of financials, commodities and defensive stocks is “almost the perfect combination for now,” he added.
The UK’s FTSE 350 Index, consisting of stocks in the FTSE 100 and domestically focused FTSE 250, has been performing well this year, gaining 5.9%, outpacing the MSCI All-Country World Index’s 4.7% increase. The FTSE 100’s dominance by internationally-focused companies has resulted in the benchmark benefiting from weaker sterling, with the blue-chip index topping 8,000 points for the first time in a record high last week. On the other hand, India’s stock market is struggling due to a weaker rupee, coupled with the fallout of a rout in the share prices of companies in the Adani Group. This is due to allegations of stock manipulation and accounting fraud by US-based short-seller Hindenburg Research.
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The MSCI India Index has declined to 6.1% this year, whereas the Adani Group which is owned by Gautam Adani, one of Asia’s wealthiest individuals, has lost nearly $142 billion in market capitalization since the Hindenburg report’s publication on 24th January. Indian stocks have suffered losses and are on course to enter a technical correction as of Wednesday, with the index losing over 10%.
However, experts have suggested that investor concerns surrounding the Adani Group are specific to the company, and not indicative of the broader Indian market.
UK Overtakes India as the World’s Sixth-Biggest Equity Market | Q&A
1. What is the reason for the UK’s equity market to surpass India’s?
Ans: The UK’s equity market has surpassed India’s due to a weaker pound, making heavyweight exporters trading in London more appealing.
2. Which country has overtaken India to become the world’s sixth-largest equity market?
Ans: The UK has overtaken India to become the world’s sixth-largest equity market.
3. Which index has been performing well this year in the UK’s equity market?
Ans: The FTSE 350 Index consisting of stocks in the FTSE 100 and domestically focused FTSE 250 has been performing well this year in the UK’s equity market.
4. Is the broader Indian market affected by investor concerns surrounding the Adani Group?
Ans: While the negative headlines around Adani have raised concerns among international investors, they remain mainly focused on the group, and investor concerns surrounding the Adani Group are specific to the company, not indicative of the broader Indian market.
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