NEW DELHI: Domestic equity market achieved a milestone on Wednesday as it hit a $4 trillion valuation after the market capitalisation of all the BSE-listed firms surpassed the Rs 333 lakh crore mark. The market now joins the ranks of the US, China, Japan and Hong Kong where the stock markets are valued in excess of $4 trillion.
This came as the Nifty50 reclaimed the 20,000 mark on the same day for the first time since September 2023. The Nifty50, along with BSE Sensex, gained over 1% each on Wednesday on the back of favourable global cues such as expectation of an interest rate cut, softening of oil prices and a correction in the dollar index.
The equity market added the last $1 trillion mark at a brisk pace as the m-cap of all BSE-listed firms had touched the $3 trillion mark on May 24, 2021. The BSE had seen listed firms’ valuation going past the $1-trillion level on May 28, 2007. It took more than 10 years for the market to add another 1 trillion as the m-cap of its listed companies reached $2 trillion on July 10, 2017.
Satish Menon, executive director of Geojit Financial Services, said the domestic market is rallying due to solid Q2 earnings and a drop in crude oil prices. “Fortunately, interest rates in the US have peaked, and the dollar index is declining, which is expected to attract foreign institutional investors (FIIs) into the Indian equity market. The consistent decline in the Consumer Price Index over the past four months has also sent out a positive signal to the market,” added Menon.
The $4 trillion milestone also comes at a time when the Chinese economy is facing difficulty in maintaining its growth. This, according to experts, has put India on centre stage and a favourite among the investor community. Foreign brokerage CLSA in a recent report said India’s searing GDP growth will propel it to the top three of the globe’s largest economies, from just $3.6 trillion today to larger than Japan’s by 2027, hitting $29 trillion by 2047 and $45 trillion by 2052. It estimates India to overtake Japan in nominal GDP in dollar terms by 2027. “China and the US will be the only economies that will be bigger than India by then,” CLSA said.