BSE m-cap rebounds to $5T, reversing war-led losses
What's the story
The total market capitalization of all companies listed on the Bombay Stock Exchange (BSE) has rebounded to the $5 trillion mark. This is the first time since before the US-Iran-Israel conflict that such a level has been reached. The combined market cap was around $5 trillion, last seen on February 27. This marks a recovery of over $600 billion from a recent low of some $4.37 trillion recorded on March 30 amid a sharp market correction.
Index performance
Sensex, Nifty still trailing pre-war levels
Despite the recovery in market capitalization, benchmark indices Sensex and Nifty are still trailing their pre-war levels by some 3,900 points and 1,100 points, respectively. However, broader market indices have briefly touched their pre-war levels. The rebound has been largely driven by a strong rally in April with Sensex and Nifty 50 gaining nearly 6.5% each.
Market rally
Mid and small caps outperform benchmarks
The BSE MidCap 150 and BSE SmallCap 250 indices have outperformed the benchmarks with gains of 9.86% and 12.9%, respectively. The recent rally was driven by improved global sentiment after US President Donald Trump expressed optimism about a permanent ceasefire between the US and Iran. However, crude oil prices remain high with Brent trading near $100 per barrel.
Investor activity
FIIs turn buyers in last 2 sessions
Foreign institutional investors have turned buyers in the last two sessions but remain net sellers of over $14 billion since the conflict began. Domestic institutional investors have largely absorbed these outflows, matching the selling with consistent buying. Despite near-term challenges like fiscal deficit and inflation amid higher oil prices, analysts believe India remains one of the more resilient large economies due to strong domestic demand and government-led capital expenditure.