2024-10-03 05:54:25
New Delhi: The domestic stock market has been on a bullish streak so far this year. During this period, major indices continuously reached new record levels. Due to this there was a huge increase in the wealth of investors. There was an increase of Rs 110.57 lakh crore. So far this year, the total market capitalization (market cap) of BSE listed companies has registered an increase of Rs 1,10,57,617.4 crore. The total capitalization of these companies has increased to Rs 4,74,86,463.65 crore ($5.67 lakh crore). The market valuation of BSE listed companies had reached an all-time high of Rs 477.93 lakh crore on September 27. On the same day, Sensex touched its highest level of 85,978.25 points.
BSE Sensex has jumped 12,026.03 points or 16.64 percent so far in the calendar year 2024. The Sensex was at the level of 72,271.94 points at the beginning of the year.
The biggest factor behind the sharp rise
Investors have benefited from this boom in the form of good returns. Analysts have attributed the sharp rise in the markets to the strong fundamentals of the Indian economy along with better liquidity conditions at the domestic level.
Santosh Meena, Head of Research, Swastika Investmart Limited, said, ‘This year we have seen strong liquidity at the domestic level. This is driven by record investments in the mutual fund industry.
Meena said that despite the selling pressure from foreign institutional investors (FIIs), Indian equity markets were successful in reaching record highs. Especially midcap and smallcap indices performed better. Retail investors made good profits as many stocks hit highs.
So far this year, BSE Midcap index has increased by 12,645.24 points or 34.32 percent and Smallcap index has increased by 14,777.09 points or 34.62 percent.
“The sharp rise in recent weeks is the result of the Federal Reserve cutting interest rates,” said Prashant Tapse, senior vice president (research), Mehta Equities Ltd. It is expected that RBI will also take a similar step in its bi-monthly review meeting.
BSE’s 30-share index Sensex closed above the 83,000-mark for the first time on September 17. Just three days later, it closed above the historic 84,000 mark for the first time. It also crossed the 85,000-mark on September 25.
Meena said, ‘Despite geopolitical tensions, global markets have also been helpful in this rise. The onset of interest rate cut cycle in the US has been a significant positive factor for emerging markets like India. This has boosted investor sentiment and increased liquidity flow into risky assets.
Reliance Industries most valuable company
The Sensex had jumped 11,399.52 points or 18.73 percent in the year 2023. During this period, investors’ wealth had increased by Rs 81.90 lakh crore. The market valuation of listed companies reached four trillion dollars for the first time on November 29 last year.
Reliance Industries is the most valuable company in the country with a market valuation of Rs 19,82,265.88 crore. TCS (Rs 15,50,820.85 crore), HDFC Bank (Rs 14,48,480.85 crore), Bharti Airtel (Rs 9,67,295.41 crore) and ICICI Bank (Rs 8,98,320.22 crore) also feature in the top five.
What could be the future?
Increasing tension between Israel and Iran has put pressure on international markets. The domestic market will also not remain untouched by this. Apart from this, recently China has announced big incentives to revive its economy. Due to this, money can move out of Indian markets and towards Chinese markets. These were the factors behind the softness in the market in the last few sessions. There are also concerns about valuation.
However, the Indian economy continues to strengthen. This is a positive sign for the stock market. A large number of domestic investors have come into the market. This will prevent any sharp fall in the market. The path forward will largely be determined by developments at the international and domestic level.
(Disclaimer: The recommendations given in this analysis are those of individual analysts or broking companies, and not of NBT. We advise investors to consult certified experts before taking any investment decision as stock market conditions change rapidly. Can.)