The market capitalisation of BSE stocks touched a record high of Rs 287 lakh crore on Wednesday. There are 4817 firms listed on the BSE.
As foreign investors continued buying local stocks and crude oil prices continued falling, the BSE Sensex indices surpassed its previous market-cap peak of Rs 286.71 lakh crore, hit on September 13, 2022.
On Tuesday, the benchmark indices – the Sensex and the Nifty -- hit a record high of 62,871and 18,662.60 points, respectively.
In the last one year, the total market capitalisation of all listed firms on the BSE have risen 12 percent, from Rs 257.18 lakh crore to Rs 287 lakh crore. In dollar terms, the rise in market cap works out to 2.43 percent, to $3.50 trillion, since the last one year, Bloomberg data showed.
Year to date, both Sensex and Nifty have gained around 7.5 percent each.
The gains in equity markets since the start of October were helped by the expectations of a pause in rate hikes amid fall in consumer price inflation of India and China and cut in economic growth targets by many brokerages and rating houses including RBI.
The increase in spending by the government, ahead of the general election in 2024, which is likely to boost growth, is another likely trigger, analysts said.
Post October 2021, the Indian markets have seen continued selling pressure from foreign investors amid expectations of rate hikes by global central banks due to higher inflation and geopolitical tensions.
The rally in domestic stocks started again since start-October 2022, on FII buying, with the Sensex and the Nifty advancing over 10 percent each. Since October 20 till date, FIIs have bought equities worth over $3.2 billion after selling for over $26 billion in the last one year.
“The rally of midcaps was profoundly supported by sectors like PSU banks, power, auto, FMCG, and capital goods. PSU banks rallied because of their historically low valuations and credit improvement. Power stocks rose on the back of the high demand for electricity and the quest for renewables, leading to a re-rating. The auto sector gained from the pent-up demand and moderation in supply issues and stocks of capital goods companies rose because of the rising industrialisation of India's manufacturing-driven economy,” said Vinod Nair, Head of Research at Geojit Financial Services.
State-owned banks were the biggest contributor to this rally. The Nifty PSU Bank index jumped over 38 percent. State-owned banks have reported stellar growth in profit and falling non-performing assets with drop in provisions.
State Bank of India, Bank of Baroda, Union Bank of India, Canara Bank and Bank of Maharashtra reported record net profit in Q2FY23.
BSE metal, PSU and oil and gas sectors also supported the rally, rising 6 percent, 13 percent, and 12 percent, respectively. The BSE auto and realty indices gained 4 percent and 5.5 percent, respectively.
BSE FMCG climbed 3 percent and BSE IT sector jumped 10 percent. BSE Healthcare gained just 2.2 percent. While the BSE 500 advanced 7 percent, the BSE MidCap and SmallCap rose 4.1 percent and 3.2 percent, respectively.
“Indian markets are defying global weakness and touching all-time highs. This is on the back of renewed interest from FIIs as the Indian decoupling story continues to play out. However, one must also realise that as we continue to see better growth rates than the world, our valuations too are priced at those premiums. Even long-term investors at this point should not betray discipline. One should ideally avoid any extreme movements and stick to the core asset allocation that one has defined for oneself,” Srikanth Subramanian, CEO, Kotak Cherry said
The last record highs of the Sensex and the Nifty were on October 18, 2021. That time, the market cap of BSE firms had touched Rs 274.70 lakh crore.
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