India's Share in Global Market Capitalization Hits 50-Month Low of 3% in May 2026: Report

India's Share in Global Market Capitalisation Hits Multi-Year Low

The Indian stock market continues to struggle for momentum, with the country's share in global market capitalisation declining to a multi-year low in May. According to domestic brokerage firm Motilal Oswal, India's share in global market capitalisation fell to 3% in May 2026, marking a 50-month low and down from 3.3% in February 2026. Despite remaining among the top 10 contributors to global market capitalisation, India's share has been steadily declining since its peak in September 2024, when it touched 4.6%.

The decline in India's share in global market capitalisation can be attributed to investor sentiment weakening amid relatively lower exposure to AI-led investment opportunities and continued pressure from subdued earnings growth. Persistent weakness in the rupee and elevated crude oil prices have also fuelled inflation concerns, prompting overseas investors to remain net sellers for most of 2026 and withdraw billions of dollars from domestic equities.

Global Market Capitalisation Rankings

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In terms of global market capitalisation rankings, the US retained the largest share at 47.9% in May, followed by China at 9.2%. Japan and Hong Kong ranked next with shares of 5.2% and 4.4%, respectively. India, with a market capitalisation of $4.4 trillion, stood in sixth position globally.

Global market capitalisation has risen by 28.3% (or USD 36.5 trillion) over the past 12 months, while India's market capitalisation has declined by 5.6% during the same period. Korea recorded the highest increase in market capitalisation at 168%, followed by Taiwan (101%), China (48%), the US (28%), Japan (24%), and Brazil (22%).

The MSCI India Index has declined 11% over the past one year, sharply underperforming the MSCI Emerging Markets (EM) Index, which gained 51% during the same period. However, over the longer term, the MSCI India Index has still outperformed the MSCI EM Index by 12% over the last decade. The MSCI India Index is currently trading at a 17% premium to the MSCI EM Index, below its historical average premium of 73%.

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The underperformance in domestic equities has also dragged down India's market-cap-to-GDP ratio to 115%, compared to 126% in 2025. The ratio has remained highly volatile in recent years, plunging to 57% of FY20 GDP in March 2020 from 80% in FY19, before rebounding sharply to 132% in FY24.