BSE surpasses ₹400 lakh crore m-cap for first time ever
What's the story
In an unprecedented event, the combined market value of all Bombay Stock Exchange (BSE) listed stocks has hit a new high, crossing the ₹400 lakh crore mark.
This significant surge is largely credited to retail investors shifting their savings from traditional investment avenues.
The increase in BSE's market cap by ₹100 lakh crore in just nine months coincided with the Sensex and Nifty touching new lifetime highs earlier today.
Market growth
Previous record of ₹300 lakh crore was set last July
The previous record of ₹300 lakh crore was set on July 5, 2023, when the Nifty was at the 19,400 level.
Since then, the index has risen over 16% and reached a new high of 22,623.90 in today's session.
Smaller stocks have seen an even more substantial rally with numerous small and midcap stocks delivering multibagger returns.
Market dynamics
Factors contributing to the market cap increase
The recent ₹100 lakh crore increase in market cap includes contributions from new listings such as Initial Public Offerings (IPOs) and other equity fundraising methods.
However, the lion's share of the gains is attributed to a simple rise in share prices.
Over the years, India's market cap has seen substantial growth, crossing ₹50 lakh crore mark in 2007, ₹100 lakh crore in 2014, and ₹200 lakh crore in February 2021.
Market performance
PSU stocks among top performers in historic bull run
In the past year, Public Sector Undertaking (PSU) stocks have emerged as top performers with investors banking on 'Modi ki Guarantee,' government's capex push, and turnaround story.
Both Nifty PSE index and Nifty CPSE have more than doubled in twelve months while Nifty PSU Bank has risen about 95%.
This bull run is unparalleled in India's history in terms of wealth creation.
Market trends
Significant rallies in micro-cap, small-cap, and mid-cap indices
Indices such as the Nifty Microcap 250, Nifty Smallcap100, and Nifty Midcap100 have also experienced significant rallies.
These indices have risen by nearly 93%, 80%, and 66%, respectively, in the last one year.
Future stock prices are expected to be influenced by factors like central bank rate actions, outcomes of the upcoming Lok Sabha elections, US presidential election, and corporate earnings season.