Sensex rally, Indian Investor Wealth Grows by Rs 3.35 trillion

Investor wealth has shot up by Rs 3.35 lakh crore (trillion) over a two-day rally of the markets, reports say. The benchmark index, BSE Sensex gained over 476 points, an increase of 0.82 per cent  on Wednesday, to close at an unprecedented peak of a little over 58,723 points. Earlier, on Tuesday, the Sensex had closed at a little over 58,247 points or 0.12 per cent.

The other index, Nifty, has also seen a rise, gaining 139.45 points or 0.80 per cent to touch a little over 17,519 points on Wednesday.

Meanwhile, the market capitalisation of BSE-listed companies neared the Rs 260-lakh crore for the first time ever. The BSE small and mid cap indices also saw an increase of 37 and 124 points, respectively.

News reports suggest that the BSE benchmark index has increased 23.24 per cent while the Nifty has gone up by 25.58 per cent, since the start of 2021. In a one-year period, the Sensex has shot up 49.72 per cent, while the Nifty has gained 51.29 per cent. Ever since the low of March 2020, the wealth of investors has gone up by 155.54 per cent. It may be recalled that the market cap of firms in the BSE universe had dropped to a low of Rs 101.86 lakh crore on March 23 last year.  The BSE-listed firms touched a collective market cap of $3 trillion or nearly Rs 218 lakh crore for the first time in May this year.

Sixth biggest stock market in terms of m-cap

With the increase in market capitalisation of the BSE-listed firms, India has now reportedly become the sixth largest stock market in terms of market capitalisation in the world overtaking France. The biggest stock market in the world is the United States, which has a market cap of $51.3 trillion. It is followed by China at $12.42 trillion, Japan at $7.43 trillion and Hong Kong at $6.52 trillion. The United Kingdom comes in fifth at $3.68 trillion. India’s market cap was at $3.4055 trillion on Tuesday, when it overtook France which was at $3.4023 trillion, according to data from news reports.

Big reforms buoy telecom, auto stocks

One of the reasons attributed to the bullish sentiments has been the reforms announced by the Cabinet on Wednesday. The Cabinet has given the green signal for relief measures for the telecom sector, including a moratorium of four years on statutory due payments by telecom firms. Another key reform announced by the government was to allow 100 per cent foreign investment via the automatic route. Further, the Cabinet has also given the go-ahead for a production-linked incentive scheme (PLI) for the auto and auto components sector. The Rs 26,058-crore PLI scheme has also been extended to the drone segment to boost manufacturing. On the back of these reforms, telecom and auto stocks rallied on Wednesday, with the BSE telecom index closing 3.45 per cent higher.

Meanwhile, improved economic indicators like July’s 11.5 per cent IIP (index of industrial production), which was close to pre-pandemic levels and an easing of retail inflation for August at 5.3 per cent, as compared to 5.59 per cent one month before, may all have contributed to the market’s comfort levels. Further, foreign institutional investment in Indian equity has touched 48 billion year-to-date, reports note. According to provisional data from the exchanges, FIIs have bought shares worth 232.84 crore in Indian equity on Wednesday, while domestic institutional investors also turned net buyers, investing in shares worth Rs 167.67 crore.

The RBI has also contributed to keeping liquidity high by maintaining low interest rates, further buoying the stock markets.

Conclusion

Amid a stock market rally, India’s investors have added Rs 3.35 lakh crore over two days, taking the market cap of companies listed on the BSE to a collective high of nearly Rs 260 lakh crore on Wednesday. Also, India overtook France on Tuesday to become the world’s sixth largest stock market in the world.

FAQs

What is the market cap of BSE-listed firms?

As of Wednesday, Sept 15, the market cap of BSE-listed companies touched a peak of nearly Rs 260 lakh crore.

Which is the world’s most valued stock market by market cap, and where does India stand?

The United States is the world’s largest stock market in terms of market cap ($51.3 trillion), while India takes the sixth place crossing $3.4055 trillion.