Markets vote $5 tn ahead of poll results

The BSE Sensex closed 53 points, or 0.07%, lower at 73,953.31, while the NSE Nifty 50 ended the day 27 points, or 0.12%, higher at 22,529.05.
Express Illustration.
Express Illustration.

NEW DELHI: The total market capitalisation of all BSE-listed companies on Tuesday touched the $5-trillion mark for the first time. With this, India joins the ranks of the US, China, Japan, and Hong Kong, where the stock market is valued at over $5 trillion. It has come at a time when extreme volatility, triggered by concerns over the outcome of the ongoing Lok Sabha elections, is keeping investors on their toes.

Aided by a strong rally in metal stocks, the market capitalisation of all BSE-listed companies reached an all-time high of `414.6 lakh crore ($5 trillion) on Tuesday. The BSE Sensex closed 53 points, or 0.07%, lower at 73,953.31, while the NSE Nifty 50 ended the day 27 points, or 0.12%, higher at 22,529.05.

Since the start of this calendar year, the m-cap of BSE-listed firms has risen by more than $630 billion. This sharp jump in valuation is mostly fuelled by spectacular rallies in mid- and small-cap stocks with their respective indices hitting many fresh highs during the period. The BSE Sensex and NSE Nifty, whose constituents are blue chips, have seen limited upside of 2-3% so far in 2024.

V K Vijayakumar, chief investment strategist at Geojit Financial Services, said the $5-trillion market cap reflects the sustained momentum of the Indian stock market.

While the long-term prospect of India’s equity market remains strong, the short-term movement will be guided by the election results.

Most market experts are going by the conviction that Prime Minister Narendra Modi-led NDA will form the next government in June. However, they fear a lower seat count for the BJP might spoil the party for investors. They also believe that a win by the opposition INDIA bloc can cause a big correction in the market.

Equity valuation surpasses India’s gdp

At $5 trillion, Indian equities are valued at more than the country’s GDP, pegged at $3.7 trillion (FY24 estimate). The gap between the m-cap and GDP has widened in the past two years. But India’s GDP is also growing and is expected to reach $5 tn in the next three years

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