Facts for Prelims (FFP)
Source: TH
Context: India has surpassed Hong Kong to become the fourth-largest equity market globally, with the combined value of shares listed on Indian exchanges reaching $4.33 trillion compared to Hong Kong’s $4.29 trillion.
- The top three stock markets are currently the U.S., China, and Japan.
- This achievement marks India’s ascent in the global financial landscape, following the crossing of the $4 trillion mark.
- India’s stock market growth has been attributed to factors such as strong GDP, political stability, foreign portfolio investment, and becoming an alternative to China for global investors and companies.
In contrast, Hong Kong has faced challenges, including COVID-19 restrictions, regulatory crackdowns, a property-sector crisis, and geopolitical tensions, impacting its appeal to investors.
The stock market is a collection of exchanges where investors can buy and sell company shares and other securities. It also includes over-the-counter (OTC) marketplaces where investors can trade securities directly with each other.
| Types of Markets | Purpose |
| Primary Market | Issuance of new securities by companies to raise capital. This includes processes like IPOs (Initial Public Offerings) and Rights Issues. |
| Secondary Market | Trading of existing securities among investors without the involvement of the issuing company through exchanges such as NSE, BSE etc. Provides liquidity to investors and allows for price discovery based on market demand and supply. |
