<p>Stock market development (SMD) plays a crucial role in promoting economic growth and financial stability in emerging economies. As these economies become more influential globally, understanding the factors driving SMD is increasingly important. Institutional quality (IQ) and financial inclusion (FI) are two key, interconnected factors: IQ enhances investor confidence and market efficiency, while FI broadens access to financial services. This study, therefore, examines the impact of institutional quality, financial inclusion, and their interaction on stock market development in BRICS countries from 2012 to 2020. Random-effects panel regression with Driscoll-Kraay standard errors is employed to examine the relationships, while two-stage least squares instrumental variables (2SLS-IV) address potential endogeneity and test the robustness of the results. Further, Diagnostic tests, including Anderson LM, Cragg-Donald F, Stock-Yogo, Sargan/Hansen J, and the Endogeneity Test, were conducted to validate the 2SLS-IV results. The major finding is that strong institutions promote stock market development, whereas the impact of financial inclusion is insignificant. Additionally, financial inclusion with better governance levels also restrains stock market development. The reason behind this finding could be that increased financial inclusion may dampen the positive effects of IQ by governance-backed financial inclusion in emerging markets often prioritises basic banking and safer assets, which, while promoting stability, can divert resources and limit growth in the stock market in emerging economies. The findings suggest that policymakers in BRICS countries must adopt a balanced approach that strengthens institutional frameworks while promoting responsible financial inclusion. By fostering transparent regulations and enhancing financial literacy, BRICS nations can develop more stable stock markets, thus ensuring sustainable economic growth and resilience in the global financial landscape.</p>