Index showdown: Sensex Beats Chinese index; Short-term declines and long-term triumphs

The Indian stock market holds the distinction of being the oldest in Asia, with the establishment of the Bombay Stock Exchange (BSE) in Mumbai in 1875. China’s stock market, comprising the Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE), commenced operations in the early 1990s. 

India boasts two major stock market indexes, namely the BSE Sensex and the Nifty 50, which represent the BSE and NSE, respectively. The Sensex is considered a key indicator of India’s domestic stock markets, the market capital of 30 constituents of Sensex holds 45% of the total market capitalization of all BSE-listed companies. China, on the other hand, relies on indexes such as the Shanghai Composite Index, the Shenzhen Component Index, and the CSI300 Index. 

In the short term, both indices experienced declines, with the Shanghai Composite Index showing a 1.32% decrease over the last month, slightly outperforming the BSE Sensex, which saw a 1.69% decline. Looking at the one-year horizon, the Shanghai Composite Index continued its negative trend with a 1.62% decrease, while the BSE Sensex showcased resilience, recording a 5.56% gain. However, over the past decade, the Shanghai Composite Index demonstrated substantial growth of 39.74%, whereas the BSE Sensex significantly outperformed, achieving a remarkable surge of 234.91%.  

In terms of inclusivity, India’s stock market surpasses China’s, particularly for smaller companies. As of the end of March 2023, India boasted around 7,491 listed companies across its two exchanges, including two foreign companies. In contrast, China’s SSE and SZSE had a combined total of 5,087 listed companies by November 10, 2023. 

As of June 2023, the total market capitalization of India’s National Stock Exchange is at $3.26 trillion and the Bombay Stock Exchange is at $3.8, while China’s Shanghai Stock Exchange is at $6.93 Trillion and Shenzhen Stock Exchange is at $4.67 Trillion.  

Both markets have experienced growth, but China’s is generally larger and more volatile. India’s market is influenced by domestic policies, while China’s is impacted by government interventions. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.