India’s global market cap share falls after D-Street’s slide this year

Mumbai: A sustained bearish trend in the domestic equities has shrunk India’s share in the global market capitalisation to just under 3% after staying above the threshold since the middle of 2022, shows data from Bloomberg. The benchmark Indian equity indices have lost nearly 13% since the beginning of 2026 amid unabated selling by foreign portfolio investors (FPIs), affecting the country’s market share, which had reached over 4.6% in 2024.

Despite the weakness in the broader market, the price-earnings (P/E) multiple of Indian benchmarks at around 20.6 remains above some of the equity indices in the world. For instance, major indices in Europe trade at P/Es between 15 and 19. Among emerging markets, indices from Brazil, China, Indonesia, Malaysia, Mexico, and Thailand have P/Es between 16 and 18. On the other hand, American indices including Dow Jones, Nasdaq, and S&P 500 trade at higher P/Es between 22 and 38, buoyed by a rally in technology stocks amid booming investments in the artificial intelligence (AI) sector.

India has been able to retain the fifth spot in global rankings based on market cap notwithstanding the current bearish trend though Taiwan and South Korea are catching up fast, helped by a rally in stocks of semiconductor companies. India had a market cap of $4.9 trillion as of May 12, a notch above the two Asian markets with market caps of $4.8 trillion and $4.7 trillion in that order. A year ago, Taiwan’s market cap was half whereas South Korea’s market cap was one-third compared with that of India.

FPIs have intensified selling in Indian equities after reporting a record outflow of $18.9 billion (₹1.7 lakh crore) in 2025 amid weaker rupee and rising inflation amid the impact of West Asian crisis on the energy importing nation. On a year-to-date basis, they have sold equities worth $23.1 billion (₹2.2 lakh crore) in 2026 and around 10% of that or $2.5 billion occurred in the first seven sessions.