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060_What is the Global Stock Market? | Explaining Market Size and Investment Impact in the US, Europe, Japan, and Emerging Countries

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Global Stock Market | Characteristics of Each Market You Should Know for Global Investing

The world of investing has become borderless. Because we live in an era where you can invest in stock markets around the world while staying in Japan, it is important to understand the major global stock markets.

Size of the Global Stock Market

The total market capitalization of the global stock market is approximately 100 to 120 trillion dollars (as of around 2024).

United States
Market Cap (approx.): 50-60 trillion dollars
Global Share: approx. 44-50%
Europe (Total)
Market Cap (approx.): 15-18 trillion dollars
Global Share: approx. 14-16%
China
Market Cap (approx.): 7-10 trillion dollars
Global Share: approx. 6-8%
Japan
Market Cap (approx.): 5-7 trillion dollars
Global Share: approx. 5-6%
India
Market Cap (approx.): 4-5 trillion dollars
Global Share: approx. 4%
Others
Market Cap (approx.): Remaining
Global Share: approx. 15-20%

There is an overwhelming concentration, with the United States alone accounting for about half of the world.

Characteristics of Each Major Market

🇺🇸 United States (NYSE/NASDAQ)

  • World's largest stock market

  • Tech, healthcare, and finance are the major industries

  • S&P 500, Dow, and NASDAQ are representative indices

  • Mature culture of information disclosure and shareholder returns

🇯🇵 Japan (TSE)

  • Centered on manufacturing and export companies

  • Many stocks with low PBR, also known as a "value market"

  • Unique culture of shareholder perks

  • Being re-evaluated due to exiting deflation and TSE reforms

🇬🇧 United Kingdom (London Stock Exchange)

  • History as an international financial center

  • Diverse industries such as resources, finance, and pharmaceuticals

  • FTSE 100 is the representative index

  • Some companies relocated to Europe after Brexit

🇩🇪 Germany (Frankfurt Stock Exchange)

  • Stock market of Europe's largest economy

  • Strong in automotive, chemical, and manufacturing industries

  • DAX 40 is the representative index

🇨🇳 China (Shanghai and Shenzhen Stock Exchanges)

  • The world's second-largest economy

  • Restrictions exist on foreign investor entry

  • Real estate issues and regulatory risks are challenges

  • Includes A-shares (mainland China) and H-shares (Hong Kong listed)

🇮🇳 India (NSE/BSE)

  • World-class economic growth rate

  • NIFTY is the representative index

  • Active inflow of foreign investment

What is a global stock index?

A "global stock index" (e.g., MSCI ACWI) covers approximately 50 countries and about 3,000 stocks.

By purchasing a single index fund, you can diversify your investments across stocks worldwide.

Trading hours for each market (Japan Standard Time, Summer)

Tokyo: 9:00–15:30
London: 17:00–1:30 next day
NY (Summer): 22:30–5:00 next day
NY (Winter): 23:30–6:00 next day

The Concept of Global Diversified Investment

While some argue that "the US is all you need," global diversification offers the following benefits:

  • Reduces risk associated with specific countries or regions

  • Captures growth outside the US (India, emerging markets)

  • Provides currency diversification

You can invest in the entire global stock market with just one fund: "eMAXIS Slim Worldwide Equity (All Country)."

Summary

The world has diverse stock markets, each with its own unique characteristics and risks. Acknowledging the reality that the US accounts for about half of the world, practicing global diversification through a worldwide equity index is a rational way to protect and grow your assets in a changing global economy.

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