The Indian stock market has achieved a milestone by surpassing the $4 trillion valuation mark. This is the time that all listed companies, on the BSE, the top stock exchange have collectively reached this level.
During the morning session, the market capitalization of BSE-listed businesses exceeded ₹3,33,26,881.49 crore, which roughly translates to $4 trillion at an exchange rate of 83.31. This growth can be attributed to sentiments in the equity market.
It’s worth noting that China, Japan, Hong Kong, and the US are also among the markets with a capitalization exceeding $4 trillion.
To put this achievement into perspective back, in May 2007 these companies collective market capitalization stood at $1 trillion. By July 2017 it had surpassed $2 trillion. Further climbed to $3 trillion in May 2021.
According to data from Bloomberg, the market capitalization of India has grown by 15 percent in this calendar year whereas China’s market capitalization has declined.
Since April 1, India’s mcap has increased by 27%. Meanwhile, the mcap of the top 100 companies has grown 17 percent to ₹195 trillion, while those outside the top 100 have seen their market value surge 46 percent to ₹133 trillion.
“India’s correlation of returns with global equities is declining and is lower than it has ever been. However, in terms of capitalization, India is an important stock market in a global context and cannot entirely leave from global equities market trends,” says Ridham Desai, MD & Head of Research at Morgan Stanley India.
“Softer global markets may limit absolute gains, while a strong global bull market may coincide with relative underperformance for low-beta markets such as India,” he added.
According to analysts, India’s achievement to turn into a $4 trillion market capitalization milestone will enhance its reputation in Asia and Emerging Markets (EM). Analysts believe that India’s strong earnings, stability, and domestic investments make it an exceptional market.
In weeks several foreign brokerages such as Goldman Sachs, JPMorgan, Morgan Stanley, and CLSA have suggested increasing investment in India within the EM and Asia Pacific (APAC) regions despite high valuations compared to its counterparts.
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