In a significant milestone, the combined market capitalisation of BSE-listed companies surpassed ₹400 lakh crore for the first time during today's trading session. This achievement comes amid a sustained rally in the large, mid and small-cap stocks, extending for the third consecutive session, with heavyweight stocks playing a major role in driving the surge.
The market sentiment has been bolstered by positive financial updates from major companies, setting an optimistic tone ahead of the upcoming earnings season.
The robust business update from heavyweight HDFC Bank has played a crucial role in boosting index performance, while strong auto sales figures have further fueled optimism among investors regarding the growing economy. Additionally, shares of Reliance Industries, the country's largest company in terms of market capitalisation, have also demonstrated strong performance.
The 30-share BSE Sensex benchmark climbed 425 points, or 0.57 percent, to hit another record high of 74,676 points. The index in the current year so far has jumped 3.28%. It finished CY23 with a remarkable return of 18.74%.
The oldest stock exchange in Asia reached a market capitalisation of ₹100 lakh crore for the first time in November 2014, followed by ₹200 lakh crore in February 2021. It achieved the ₹300 lakh crore milestone in July 2023, and now, just nine months later, it has crossed the ₹400 lakh crore mark.
On the other hand, the combined market cap of NSE-listed firms is also hovering around the ₹400 lakh crore mark.
On December 1, 2023, the market capitalisation of the NSE-listed firms crossed $4 trillion ( ₹334.72 lakh crore). The journey from $2 trillion in July 2017 to $3 trillion in May 2021 took about 46 months, whereas the subsequent leap from $3 trillion to $4 trillion occurred in just 30 months.
The index took just three months to cover the next $0.75 trillion. The market rally was propelled by significant retail participation and sustained foreign portfolio investor (FPI) inflows, bolstered by improved global sentiment and strong domestic economic growth.
Multinational corporations are increasingly shifting their manufacturing operations to India. With its vast scale and potential, India emerges as a compelling alternative to China for global businesses seeking to expand their manufacturing footprint.
Looking forward, the upward momentum in Indian stocks is poised to persist, with market participants anticipating continued political stability leading up to the upcoming Lok Sabha elections.
ICICI Direct Research has noted a historical trend in the Nifty 50 during the general election years. It said that the index tends to reach its lowest point in the first quarter, followed by a subsequent rally of at least 14% leading up to the general election outcome. This pattern has been observed consistently in each of the seven instances over the past three decades.
Given that the index experienced a 5% correction in January, which is common in bull markets, followed by two months of further correction, the brokerage expects the index to maintain the same rhythm and head towards the 23,400 level by June 2024, driven by BFSI, auto, capital goods, and metal.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
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