Stock markets in lockstep.

"The Pakistan Stock Exchange's benchmark KSE-100 index briefly crossed the 54,000 barrier on Tuesday (yesterday) before shedding much of its gains and closing in the red." Dawn. "The overall trading volume increased 7.3pc to 546 million shares. The traded value increased 14.8pc to Rs 17.9 bn on a day-to-day basis." But, "Foreign investors were net sellers as they offloaded shares worth $0.78m." Is the soaring share market a sign of a booming Pakistan economy? "The KSE-100 index has gained more than 30pc this year, with a turnaround in fortunes coming after the IMF approved the loan program in July to avert a sovereign debt default." IMF loan and a possibility of "sovereign loan default" don't go with a healthy economy. Actually, because of "heavy damage to crops and livestock" due to floods, "Overall, real gross domestic product (GDP) is estimated to have declined by 0.6 percent in FY23," and "Private consumption also shrank with weakened labor markets and surging inflation." World Bank. The Indian stock markets are also booming. Of course, India is not Pakistan. Here "RBI governor Shaktikanta Das has said that GDP growth for the second quarter of FY24 is likely to surpass expectations based on early indicators. The central bank had projected GDP growth of 6.5% for the second quarter." TOI. The stock market index, the S&P BSE Sensex is at 64,942.34 this morning, having reached a high of 67,927.23 on 15 September 2023 (yahoo). That is nothing. "Sensex to hit 1 lakh (100,000) mark? Renowned global investor Mark Mobius has expressed his optimism and ultra-bullishness about India's growth potential, stating that the benchmark Sensex could reach 100,000 milestone in the next five years." ET. If the Sensex goes on rising can it reach infinity? On the other hand the Dow Jones Industrial Average in the US is at 34,152.60 (spglobal.com), having reached a high of 36,799.65 on 4 January 2022 (Investopedia). Even though the US "Gross domestic product increased at a 4.9% annualized rate last quarter, the fastest since the fourth quarter of 2021, the Commerce Department's Bureau of Economic Analysis said in its advance estimate of third-quarter GDP growth." VOA. Why are Indian markets racing ahead while US markets are range bound? Because of retail investors in India. The number of demat accounts have gone up from 39.4 million in December 2019 to 129.7 million in September 2023, wrote Vivek Kaul. 'Demat account' stands for 'dematerialised account' in which shares are held in digital form. HDFC. The total amount of household savings invested in stocks has jumped from Rs 63.8 billion in 2018-19 to Rs 385.6 billion and Rs 486.1 billion in 2020-21 and 2021-22, respectively. The reason for this rush to stocks is an attempt to increase income. "In 2017-18, 13.6% of all workers were employed as an 'unpaid helper in household enterprises'." "In 2022-23, their proportion reached an all-time high of 18.3%." DH. Household net savings are falling. "A dip in Indian households' net financial savings due to elevated debt threatens to choke a major source of funds for the government's capital investments - key for the nation to retain its mantle of the fastest-growing major economy." ET. Will India's market capitalisation exceed that of the US? Will Pakistan follow us? Seems somewhat bemusing.