Global Investor

Valuations on the boil

Gurumurthy K | Updated on November 24, 2017


Global market capitalisation up 3 per cent

Election euphoria made the Indian stock market go on a merry ride this year. Both the Sensex and the Nifty hit new life-time peaks at 25,375 and 7,563, respectively, this month. The indices are up about 14 per cent year-to-date. India’s market capitalisation has surged 13.6 per cent in the last one month and 24.9 per cent year-to-date. Data on changes in market capitalisation in other countries this year also reveal some interesting trends.

Surprisingly, crisis-hit Ukraine leads the table with a whopping 135.4 per cent surge in market capitalisation since the beginning of this calendar year. Ukraine’s solicitation of support from the International Monetary Fund (IMF) and the latter approving a $17 billion loan has helped its stock index surge over 30 per cent. On the other hand, the threat of sanctions following the annexation of Crimea by Russia has badly hit the Russian financial market. Russia has lost 11.8 per cent in market capitalisation. Venezuela, whose stock index was the world’s top performer in 2013, has lost about 11.4 per cent year-to-date in market capitalisation following currency devaluation in January. Among the other BRICS nation, Brazil and South Africa are up by 2.6 per cent and 5 per cent, respectively. A slowdown in growth reduced China’s market cap by 4 per cent this year.

Currently, the BRICS countries account for about 12 per cent of total world market capitalisation. Among the developed nations, the market capitalisation of the US is up 3 per cent. In Italy, Spain and France, the value of stocks traded is up 12.6, 9.8 and 6.3 per cent, respectively, while Germany did not register any change. In Japan, it is down 3.6 per cent.

Of the 85 countries whose market capitalisation data is available, 62 have recorded an increase this calendar year.

Published on June 01, 2014

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