India Recoups Fifth Place In World Stocks As Adani Claws Back

India has reclaimed fifth place among the world’s top equity markets by value after being briefly usurped by France during a selloff of Adani Group shares.

India’s market capitalization stood at $3.15 trillion on Friday, inching back above France with the UK retaining seventh place, according to data compiled by Bloomberg that shows the combined value of companies with a primary listing in each country.

The outlook for earnings growth helped revive the appeal of the South Asian country’s equities, which have outperformed most global peers for the past two years.

Still, the total value of India’s market was about 6% lower than Jan. 24, the day before the selloff in Adani stocks began. While steps by the group to restore investor confidence have helped its shares reclaim some value, they remained $120 billion lower than before the rout.

After withdrawing funds from Indian equities since November, foreign investors were net buyers during two of seven sessions this month through Feb. 9. The purchases followed the government’s plan at the start of February to increase capital spending, while the central bank last week signaled a slower pace of interest rate increases.

As the latest quarterly reporting season unfolds, analysts estimate earnings per share at MSCI India companies will increase 14.5% this year. That’s similar to expectations for China and better than most major markets, data compiled by Bloomberg Intelligence show. By contrast, the EPS of US firms will probably grow by 0.8%, with the reading for European counterparts expected to be almost flat.