Indian Equities Reach Historic $4 Trillion Mcap Milestone For The First Time

The combined market valuation of all the firms listed on the Bombay Stock Exchange touched Rs 333 trillion, converting into $4 trillion at the exchange rate of 83.31 against the US dollar. 

Indian markets reached the historic $4 trillion market capitalisation (Mcap) milestone for the first time on Wednesday. The combined market valuation of all the firms listed on the Bombay Stock Exchange touched Rs 333 trillion, converting into $4 trillion at the exchange rate of 83.31 against the US dollar. 

Notably, there are only three countries in the $4 trillion-plus Mcap club currently, namely the US, China, and Japan. The US has the world’s largest equity market, with a Mcap of $48 trillion, followed by China at $9.7 trillion, and Japan at $6 trillion, reported PTI. Hong Kong also belongs to this club, however, a major contribution for the country comes from firms belonging to China. 

India’s market capitalisation increased almost 15 per cent in the calendar year so far, Business Standard reported citing Bloomberg data. The data also revealed that China’s Mcap eroded by 5 per cent in the reviewing period. On the other hand, the US remained the only member in the top-10 Mcap club which saw a growth faster than India, at 17 per cent. The overall global market capitalisation climbed 10 per cent in the year to $106 trillion. 

The increases in market capitalisation in the year were driven by gains in the broader market mid and small cap stocks. Stocks lying outside the top 100 now account for 40 per cent to the nation’s Mcap, against 35 per cent share during the start of the fiscal year. 

India’s Mcap has increased 27 per cent since the start of the current financial year, from April 1. At the same time, the Mcap of the top 100 firms has risen 17 per cent to touch Rs 195 trillion, while the firms outside the top 100 club reported a surge of 46 per cent in their market value to Rs 133 trillion. 

Commenting on the performance of Indian equities, Ridham Desai, MD and Head of Research, Morgan Stanley India, noted, “India's correlation of returns with global equities continues to decline and is lower than in history. That said, India is a large stock market in terms of capitalisation in a global context and cannot completely deviate from global equity market trends. Softer global markets could cap absolute returns whereas a strong global bull market could coincide with relative underperformance for low-beta market like India.”