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Market cap of BSE-listed companies hits $5 trillion first time ever

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The total market cap of all BSE-listed companies reached $5 trillion or over Rs 414.46 trillion, showing a climb of over $633 billion since the start of the year.:

The market capitalisation of companies listed on BSE has crossed a record $5 trillion for the first time - hitting a fresh high on May 21 - data on the BSE website showed, underscoring an ongoing rally in the Indian stock markets.

The total market cap of all BSE-listed companies reached $5 trillion or over Rs 414.46 trillion, rising by over $633 billion since the start of the year. Although the flagship Sensex index still remains 1.66 percent below its all-time high, the BSE Mid and Smallcap indices hit fresh high.

The Market Cap Journey

BSE's total market capitalization had hit $4 trillion in November 2023, and has now soared past $5 trillion in just six months. BSE-listed firms reached the market cap of $1 trillion back in May 2007, doubling in over a decade to $2 trillion in July 2017, and then reaching the $3 trillion mark in May 2021.

Currently, only four stock markets world over are in the $5-trillion-plus club, namely, USA, China, Japan and Hong Kong. The US leads with a market cap of almost $55.65 trillion, followed by China ($9.4 trillion), Japan ($6.42 trillion), and Hong Kong ($5.47 trillion). According to Bloomberg, in 2024 so far, India's market capitalization has risen nearly 12 percent, while for the US it has gone up by 10 percent, and Hong Kong's has risen 16 percent. China and Japan's market cap have remained largely stagnant, with China falling 1.4 percent and Japan rising just 3 percent.

What's Fuelling The Rally

The surge in the market capitalization of Indian equities was primarily driven by a surge in broader market indices. While benchmark Sensex has risen by just 2.3 percent so far in 2024, BSE Midcap and Smallcap are up by 16.3 percent and 11.5 percent, respectively. These gains has come despite volatility in equities in recent months.

Volatile Times

The stock market volatility has increased ahead of the upcoming election results, expected on June 4, and the exit poll findings which are scheduled to be revealed on June 1. There has been some chatter around the turnout in this year's assembly election, while other market participants believe this is not a significant factor to alter the outcome.

The surge in mid and smallcap stocks can be attributed to factors like lower Foreign Portfolio Investor (FPI) holdings - leading to scope of increase - and earnings surprise in these stocks.

Markets seem to have factored in a continuity in government policies, according to some investors. India's long-term growth outlook remains promising, with a projected GDP growth of 7% for FY25. Falling headline inflation and a favourable monsoon forecast too are expected to offset pricing pressure on companies. High-frequency indicators such as PMIs, GST collection and domestic air passenger growth are positive compared to historical standards, it said.