Since the begging of the year, the value of India’s stock markets has been rising and have been swelled up to 8.11% to $2.72 trillion, Bloomberg data showed. Hong Kong pipped India to the top position with a market cap gain of 13.41% to $7.39 trillion. India’s equities markets gained the most since January after Hong Kong, among the world’s top 10 markets, highlighting sustained bullish investor sentiment especially after the recent Union budget.

Driven mostly by global liquidity inflows, the markets set new records this year, when the benchmark BSE Sensex crossed the 50,000-mark, while the Nifty crossed the 15,000-mark.

Among other large markets, the US gained 7.07% to $45.66 trillion, while China’s aggregate market cap expanded 6.14% to $11.57 trillion in 2021 so far.

In dollar terms, the Sensex gained 7.78%, while Hong Kong’s Hang Seng Index jumped 10.32% and China’s index expanded 6.51%. “The fundamental factor supporting India’s outperformance in February is December quarter results, which have beaten expectations by an impressive margin, across industries. There are clear indications that we are in an expansionary phase in the earnings cycle. If this momentum sustains and FIIs (foreign institutional investors) continue to buy, the market can move up further,” said V K Vijayakumar, chief investment strategist at Geojit Financial Services. “The banking sector’s excellent results saw the Bank Nifty move up by 17% so far in February”. The sustained rally has lifted Indian markets more than 100% from the lows of March last year with foreign investors continuing to pump in money in hopes of a revival in the economy buoyed by government measures aimed at driving consumption growth. This has, however, led to concerns of stretched valuations among analysts. The benchmark Nifty currently trades at 22.36 times its estimated 12-month forward earnings, compared to the 10-year average of 15.87 times.

Foreign investor inflows so far this fiscal surged to an all-time high of $34.01 billion. Since January, foreign investors poured in $4.54 billion into Indian equities, the second-best inflow among emerging markets after Brazil, which saw investments of $4.69 billion during the same period. Domestic institutional investors were net sellers of ₹1.30 lakh crore in FY21 and ₹18,944 crores in 2021 so far. “The sharp recovery in markets has been driven by a benign liquidity backdrop, better containment of covid-19 cases, sharp recovery in corporate earnings, and a market-friendly budget,” said analysts at Motilal Oswal Financial Services Ltd is a 9 February note.