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BSE m-cap hits record high! On Monday, the combined market capitalisation of all listed stocks on BSE crossed the Rs 400 lakh crore milestone for the first time as both the Sensex and Nifty reached new all-time highs. This surge, driven by retail investors diverting funds from traditional avenues, marks a Rs 100 lakh crore growth in BSE’s market cap within just 9 months.
According to an ET report, in July 2023, the market cap hit Rs 300 lakh crore when Nifty stood at 19,400. Since then, the Nifty has soared over 16%, recently peaking at 22,623.90. Small and midcap stocks have witnessed significant gains, with many offering high returns. The recent increase of Rs 100 lakh crore includes contributions from new listings like IPOs and equity fundraising, but the majority of gains stem from rising share prices.
India’s market cap milestones include Rs 50 lakh crore in 2007, Rs 100 lakh crore in 2014, and Rs 200 lakh crore in February 2021. The current bull run is unprecedented in terms of wealth creation for India.
Also Read | Why are foreigners shopping for Indian stocks?Foreign funds’ gross purchases at record high of Rs 4 lakh crore in March
Over the past year, PSU stocks have outperformed, with Nifty PSE and Nifty CPSE doubling, and Nifty PSU Bank rising by about 95%. The Nifty Microcap 250, Nifty Smallcap100, and Nifty Midcap100 indices have surged by 93%, 80%, and 66% respectively.
Looking ahead, factors like central bank rate decisions, election outcomes, and corporate earnings will influence stock prices. Dr. V K Vijayakumar from Geojit Financial Services says there is a dynamic macroeconomic landscape. According to him, at the start of this year, the market anticipated seven rate cuts by the US Fed in 2024. This projection later reduced to three, and now there’s a growing belief that the Fed might only cut rates twice this year.
He is of the view that the robustness of the US economy and job market has caught many experts and market players off guard. Despite the downscaling of rate cut expectations, the primary market remains resilient, consistently reaching new highs. This resilience is expected to offer global support for equity markets such as India.
India’s capital markets have seen a surge in retail participation, with demat accounts increasing from 36 million in March 2019 to 151 million in March 2024. Domestic equity inflows have totaled $92.7 billion in the last five years.
Motilal Oswal stated that India Inc. raised $92.9 billion through primary markets in the past five years, emphasizing India’s growth potential. It forecasts India’s GDP to surpass $4 trillion in FY25/26 and $8 trillion by FY34.
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