Groww Digest

6 Day Course

Theme: US vs Indian markets

Nov 21 to Nov 27, 2022

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series, Groww Digest - all things personal
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Day 1: Monday
6 Day Course | Theme: US vs Indian markets

The US economy is the world’s biggest

economy. Investing in US stocks has proven to
be a lucrative decision for many investors.

This week, we’ll try and understand the

differences between the stock markets of the
US and India.

The first difference: size.

The market cap of the entire stock market of

the US is around $47 trillion. The market cap
of the entire Indian stock market is around
$3.2 trillion.

The USA’s GDP is around $23 trillion. India’s

GDP is about $3.1 trillion.

Some of the world’s biggest companies are

based in the USA.

In the US, the 500 biggest companies are

categorised as large-cap. In India, it is 100.

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Day 2: Tuesday
6 Day Course | Theme: US vs Indian markets

Composition.

The biggest companies in the US markets are

all mostly tech companies: Amazon, Microsoft,
Apple, Google, etc.

Many of these tech companies have a market

capitalisation greater than $1 trillion.

The biggest Indian company, Reliance, has a

market cap of around $200 billion — which is
much smaller than many US companies.

Most of the biggest companies in the Indian

markets belong to the banking and financial
services sector.

Tech stocks are not as dominant in the Indian

markets — yet.

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Day 3: Wednesday
6 Day Course | Theme: US vs Indian markets

Retail participation.

In the US, more than half of the population -

around 60%, invests in the stock markets
either directly in stocks or indirectly via
mutual funds, index funds, and ETFs.

In India, this is only about 3-4%.

This means a huge portion of the Indian

population is not able to take advantage of
the growth that occurs in India.

Of late, retail participation has been growing

in India.

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Day 4: Thursday
6 Day Course | Theme: US vs Indian markets

Diversification.

In the Indian markets, the stocks range from

different sectors like financial services, natural
resources, IT, and so on.

Most of the stocks are of companies that

operate only or mostly in India.

On the other hand, the stocks in the US

markets are of companies that operate across
the globe.

The sectors they belong to are also diverse.

This ensures that the diversification is much

better in the case of the US markets.

This is why many investors consider investing

in the US markets to be of lower risk than in
Indian markets.

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Day 5: Friday
6 Day Course | Theme: US vs Indian markets

Volatility.

The US markets have a greater exposure of

the globe. This means, local economic factors
affect India more often.

This results in the US markets being more

stable than the Indian markets.

The Indian markets usually have much bigger

swings than the US markets.

Indian being an ‘emerging market’ — a

country whose economy is deemed to be
developing and not developed, foreign
investors are a lot more quick to pull out
money from India.

And foreign investors form a big portion of the

investors in India.

Page: 6
Day 6: Sunday
6 Day Course | Theme: US vs Indian markets

We’ve reached the end of this week’s course

that started on Monday.

Here’s a test you should take. Get pen and

paper!

Question 1:
The US stock markets’ capitalisation is:

-$17 trillion
-$27 trillion
-$47 trillion

Question 2:
Which country’s stock markets have a greater
share of tech companies.

-US
-India

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Day 6: Sunday
6 Day Course | Theme: US vs Indian markets

Question 3:
60% of India’s population invests in the stock
markets directly or indirectly.

-True
-False

Question 4:
Indian stock markets are considered more
diversified than the US stock markets.

-True
-False

Question 5:
The Indian stock markets are less volatile than
the US stock markets.

-True
-False

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Day 6: Sunday
6 Day Course | Theme: US vs Indian markets

Answers:

Q1: $47 trillion;

Q2: US;
Q3: False;
Q4: False;
Q5: False.

Page: 9
 That’s it for this week!

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See you next week!

—Groww Digest Team

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