Wednesday, i.e. 12 January 2022, witnessed a new record as the market capitalization of firms listed on BSE rallied over Rs. 277.22 lakh crore. Resultantly, the investors’ wealth also rose by Rs. 6,08,024.55 crores in just 4 days.
Moreover, this BSE benchmark rallied for the fourth session consecutively to jump 533.15 points or 0.88% and then settle at 61,150.04. Hence, in just 4 days, this 30-share benchmark soared 1548.2 points.
In a broader sense, the midcap companies settled for 1.08% growth, and smallcap ones went up by 0.70%.
Relying on this positive trend, the market capitalization of these companies made this significant jump.
What’s Driving This Growth?
India’s stock market is on a winning streak irrespective of the COVID-19 pandemic. Following are some notable reasons that are driving this growth –
- Rapid Vaccination
India is one of the few countries globally that has vaccinated its citizens at a rapid pace. This has been a fundamental reason behind investor optimism, which has resulted in this drive in the stock market.
- RBI’s Accommodative Stance
The Reserve Bank of India’s stance on policy rates has managed to maintain the liquidity in the market. The apex bank of India has maintained a relatively low repo and reverse repo rate, which prompted financial institutions to charge a reduced interest rate on loans.
Additionally, the comparatively lower return on investment on traditional investment instruments like bank deposits and likes has driven individuals towards the stock market for better profits.
- Positive Third Quarter
A positive end to the third quarter of FY2022 has boosted investor confidence further. In an overall sense, the 3rd quarter result for top organizations has been positive, which shows the healthy momentum of India’s economy.
If this trend continues through the last quarter, it will further boost the market.
- The Ever-increasing Presence of FIIs
When talking about the factors that are driving this growth of India’s stock market, one cannot skip the contribution of Foreign Institutional Investors (FII). Since these investors are increasing their footprint in India in almost every segment, it will also drive this growth further.
Led by the banking, energy, and automobile sector, the BSE index continued its winning streak for 4 days straight. This growth comes in sharp contrast to growing COVID-19 cases in India and globally.
Nonetheless, keeping an eye on this movement and the recent difference in return can help investors get a fair idea of how to move about their investment plans.
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Source: Financial Express
Frequently Asked Questions
- Who are the leading gainers of this recent run of BSE?
- Who is the highest-rated company as per market capitalization in India?
As per market capitalization in India, the highest-rated company is Reliance Industries, with Rs. 1,706,069.94 crores.
- What are the current repo and reverse repo rates?
The current repo and reverse repo rates are 4% and 3.35%, respectively.
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.