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Indian Stock Market vs. US Stock Market Comparison

Indian Stock Market vs. US Stock Market Comparison

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Investment and securities are subject to market risks. Please read all the related documents carefully before investing. The contents of this article are for informational purposes only, and not to be taken as a recommendation to buy or sell securities, mutual funds, or any other financial products.

Every investment 101 guide lists geographical diversification as the cornerstone of lucrative investment strategies. Given the promising big tech giants and budding startups ruling the US stock market, seizing investment opportunities there is a no-brainer. However, in everything from size and currency to basic investment norms, investing in India vs. the USA spells a whole different ball game. Let’s take a deep dive into the Indian stock market as compared to the US stock market comparison is needed. 

Solving the Indian Stock Market vs. US Stock Market Puzzle 

Before we proceed to the US stock market vs. Indian stock market comparison, here’s a quick overview of both markets:

Indian Stock Market 

  • Hailed as one of the fastest growing stock markets in the world.
  • Operates on a depository system where the stocks you buy remain in a dematerialised or Demat account.
  • Trading happens through the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). 
  • The oldest Sensex index tracks the performance of the top 30 largest (market cap) stocks on the BSE. 
  • The younger, Nifty Index is composed of the top 50 highest-traded stocks on the NSE. 

The US Stock Market

  • As one of the most diverse markets in the world, it is home to big players like Amazon, Tesla, Microsoft, and others.
  • Operates on a custodial model where you don’t directly own securities but they remain in an account with a custodian bank. 
  • The New York Stock Exchange (NYSE) is America's oldest and largest stock exchange.
  • The younger exchange- NASDAQ is home to all major tech players. 
  • The Dow Jones Industrial Average (DJIA), the S&P 500, and the NASDAQ Composite are the most important indices.

Indian Vs. US Stock Market: A comparison

This US vs. Indian stock market comparison shows the clear benefits of US portfolio diversification. The global exposure of this market helps moderate market movements in the long run, balancing out volatility and hedging risks associated with a hyper-volatile domestic market. Similarly, since the investment is in USD, there’s also a possibility of higher returns, given the history of dollar appreciation. 

Which Market is Better? 

This Indian stock market vs. US stock market comparison brings out the highs and lows of investing in each. That said, exposing your portfolio to the US market with a calculated and risk-analysed strategy can help bring about necessary diversification and tap into the benefits of its global affinity. 

To start investing in US stocks, you can bank on Fi Money. To simplify the world of US stocks, Fi Money brings you in-app explainers, Curated Collections, and built-in filters that help you make informed decisions that meet your investment needs. 

Frequently asked questions

What is the difference between the Indian stock market and the US stock market in terms of market size?

The Us stock market commands a market capitalisation of $40.51 Trillion. The Indian stock market has a market cap of $3.4 Trillion. So, the US market is more than 10 times bigger than its Indian counterpart. 

What are the key differences between the regulations and policies governing the two stock markets?

While the US stock market is based on the custodial model, the Indian market is based on a depository model. Moreover, the US market is governed by the SEC or Securities and Exchange Commission, while the Indian market is governed by SEBI or the Securities and Exchange Board of India. 

What are the key differences in the types of companies listed in the Indian and US stock markets?

The Indian stock market has primarily domestic companies listed on its exchanges, while the US market is home to some of the most prominent global companies. So, you can find top US companies as well as major corporations from China, London, and other top cities.

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