Equity Market Investors Turn Richer In 2023 By Rs 80.62 Lakh Crore

As of December 28, 2023, the S&P BSE Sensex gained 11,569.64 points or 19 per cent, while the market capitalisation of the firms listed on the index hit an all-time high of Rs 3,63,00,558.07 crore.

The equity markets this year saw investors add Rs 80.62 lakh crore to their wealth as several positive factors helped the stocks generate a strong rally. Experts stated that India’s robust macroeconomic fundamentals, along with the political stability coming from the Bharatiya Janata Party’s victory in recent elections in three crucial states helped the stock markets move upwards in 2023.

Other factors such as optimistic corporate earnings outlook, signals from the US Federal Reserve about three potential rate cuts next year, and active participation from retail investors also helped the stock markets in their rally ahead, reported PTI. 

As of December 28, 2023, the S&P BSE Sensex gained 11,569.64 points or 19 per cent, while the market capitalisation of the firms listed on the index gained by Rs 80,62,310.14 crore to reach an all-time high of Rs 3,63,00,558.07 crore.

Sunil Nyati, managing director, Swastika Investmart Ltd, noted, “The Indian market has demonstrated resilience, emerging as one of the standout performers within the broader emerging markets basket. 2023 is not just a good year for the Indian stock market but also a triumph for retail investors. Retail investors, no longer prone to panic during corrections, are confidently holding onto their investments, ready to ride the wave of India's economic ascent.”

Further, the combined market valuation of all listed companies on BSE touched the $4 trillion mark for the first time on November 29, 2023. This growth has been attributed to factors such as the impending elections leading to political stability, hopes of rate cuts in 2024, and a fall in energy prices, attracting foreign investors into the market. Nyati noted that this inflow of foreign funds helped large cap indices touch fresh record highs.

Motilal Oswal Broking and Distribution, in its note, said, “ It took just two-and-a-half years to hit the USD 4 trillion landmark after the market capitalisation (m-cap) of all listed companies on the BSE touched the USD 3 trillion mark on May 24, 2021. With the BJP's sweeping victory in the state elections of Rajasthan, Madhya Pradesh, and Chhattisgarh, the confidence of investors regarding political continuity post 2024 Lok Sabha elections has received a big boost. Already, the sentiments were buoyed by a healthy trend in corporate earnings growth and resilient domestic macros and is now likely to strengthen further. This augurs well for macro and policy momentum for India, which, at the moment, is seeing the highest growth among major economies.”

The BSE Sensex also touched a fresh peak of 72,484.34 points on December 28, 2023, after hitting a 52-week low of 57,084.91 points on March 20 of the year. November and December months turned out to be the most rewarding in terms of returns, Sampath Reddy, chief investment officer, Bajaj Allianz Life Insurance, stated. 

“The 30-share BSE benchmark jumped 4.87 per cent in November while so far in December, it has rallied 8 per cent. India's strong macroeconomic fundamentals, marked by robust GDP growth, moderating inflation, and a stable rupee, played a crucial role in this resilience. This, coupled with improving global conditions like softening inflation, central bank pauses on rate hikes, and continued earnings growth, led to a market rally across Indian indices,” Reddy noted. 

The broader markets also registered a strong rally and helped add to the strong sentiment in the markets. The BSE smallcap gauge gained 13,455.51 points or 46.51 per cent till December 28, 2023, while the midcap index rose 11,213.69 points or 44.29 per cent in the period. Nyati noted that the midcap and smallcap stocks remained in the news helped by robust macroeconomic fundamentals and abundant domestic liquidity. However, he added, that the last two months saw a major shift, with the largecap indices dominating the markets. 

Further, multiple mainboard Initial Public Offerings (IPOs) and share listings also helped move ahead the rally in the equity markets. Earlier in 2023, the concerns in the US banking sector negatively affected markets at the global level. 

“The monetary tightening by the Fed also had a negative impact. Geopolitical issues like the war in West Asia raised concerns temporarily but had no lasting impact on the market. Towards the end of the year, the global market construct turned positive with declining US bond yields and dovish message from the Fed. In India, the robust performance of the Indian economy and good corporate earnings contributed to the rally,” stated V K Vijayakumar, chief investment strategist, Geojit Financial Services. 

At present, Reliance Industries remains the most valued firm in the country with a market valuation of Rs 17,63,001.81 crore, followed by Tata Consultancy Services with a valuation of Rs 13,90,823.72 crore. The other top three companies on the list include HDFC Bank, ICICI Bank, and Infosys in the order. Further, investors became wealthier in 2023 by more than Rs 16.38 lakh crore as compared to a year earlier.