Indian Equity Market Achieves Historic $4 Trillion Market Cap Milestone for the First Time

• ByStartupStory     |    November 30, 2023

The Bombay Stock Exchange (BSE) achieved a historic milestone on Wednesday as the combined market valuation of all listed companies surpassed $4 trillion for the first time. This remarkable feat reflects a positive trend in equities and underscores the resilience and growth of the Indian stock market.

Notably, the journey to the $4 trillion landmark took just two-and-a-half years, following the attainment of the $3 trillion market capitalization on May 24, 2021. The progression of market valuation on the BSE has witnessed notable milestones over the years. The transition from $1 trillion to $1.5 trillion occurred in just over seven years, with the market cap reaching $2 trillion on July 10, 2017, taking ten years to double from the $1 trillion level. Subsequent milestones were achieved more rapidly, with the $2.5 trillion mark reached on December 16, 2020.

The positive sentiment in equities contributed to the BSE-listed companies’ market capitalization reaching INR 3,33,29,095.37 crore by the end of trade, translating into $4 trillion. The BSE benchmark Sensex experienced a 9.96% rally this year, and the market capitalization of all listed firms on BSE increased by INR 50.90 lakh crore.

Global comparisons highlight the significance of BSE’s achievement, with market valuations exceeding $4 trillion in major economies. The United States leads with a market valuation of $47.78 trillion, followed by China ($9.74 trillion), Japan ($6.02 trillion), and Hong Kong ($4.78 trillion), according to HDFC Securities.

Satish Menon, Executive Director at Geojit Financial Services, noted that the BSE market cap hitting $4 trillion signals a fresh momentum in the stock market. The rally in the Indian stock market is attributed to solid Q2 earnings and a decline in crude oil prices. While domestic liquidity provides support, attracting Foreign Institutional Investors (FIIs) remains a focus, especially with favorable conditions expected following the peak in U.S. interest rates and the declining dollar index.

The broader market rally, exemplified by the BSE smallcap and midcap indices, has further contributed to overall optimism. The BSE smallcap gauge surged 38.24% this year, while the midcap index climbed 34.21%. Additionally, the influx of mainboard Initial Public Offerings (IPOs) and share listings has played a crucial role in propelling the equity markets’ upward trajectory. Deepak Jasani, Head Retail Research at HDFC Securities, highlighted that the Indian market cap has seen significant growth in this fiscal year, supported by Foreign Portfolio Investor (FPI) flows and earnings resilience.

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