NEW DELHI: Despite last month’s warning by market regulator Sebi that a “froth” is building up in Indian equities, the market capitalisation (m-cap) of BSE-listed companies crossed the Rs 400 lakh crore mark for the first time on Monday.
This valuation milestone was accompanied by a sharp rally in benchmark indices as the BSE Sensex traded in close vicinity of the 75,000 mark, while the NSE Nifty50 surpassed the 22,600 level.
Domestic market, now equivalent to 1.33 times the size of the country’s GDP, continues to defy global slowdown and add more trillions to its kitty at a record pace. It took only 9 months, the shortest interval ever, for the combined m-cap to add last Rs 100 lakh crore as the valuation of BSE-listed companies had breached the Rs 300-lakh-crore mark in July 2023.
It had taken about 2 years and 5 months for the m-cap to grow from Rs 200 lakh crore to Rs 300 lakh crore and 6 years 11 months to advance from Rs 100 lakh crore to Rs 200 lakh crore. BSE’s combined m-cap hit Rs 100 lakh crore for the first time in March 2014, right before the general election when Narendra Modi became Prime Minister for the first time. Experts believe there is still some steam left in the market as favourable election results, normal monsoon and expected rate cuts by the Federal Reserve may prompt another round of fresh buying in the coming months. The long-term growth opportunity, however, remains intact.
The market on Monday touched fresh peak as the NSE Nifty50 ended 147.25 points, or 0.65%, higher at 22,660.95 while the BSE Sensex rose 494.28 points, or 0.67%, to close at 74,742.5. Intraday, Nifty50 hit an all-time high of 22,697.30, and Sensex touched a new life-high of 74,869.30. The m-cap of BSE-listed firms also reached an all-time high of Rs 4,01,16,018.89 crore ($4.81 trln) during the session. “The buoyancy in sentiment continued, led by sectorial tailwinds and Q4 earnings growth expectation…On the global front, after the release of robust US job data, investors are awaiting release of US CPI data, ECB policy, and UK GDP data this week,” said Vinod Nair, head of research, Geojit Financial Services.
As per Nair, the up-move was largely broad-based, with outperformance by auto, realty, oil & gas, and consumer discretionary, while IT was tepid owing to insipid Q4 growth expectations due to a slowdown in spending.
Mkt defies global slowdown, adds more trillion
Domestic market, now equivalent to 1.33 times the size of India’s GDP, continues to defy global slowdown and add more trillions to its kitty at a record pace. It took only 9 months, the shortest interval ever, for combined m-cap to add last Rs 100 lakh crore as valuation of BSE-listed firms had breached Rs 300-lakh-crore mark in July 2023. It had taken about 2 years and 5 months for the m-cap to grow from Rs 200 lakh crore to Rs 300 lakh crore.