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Dalal Street investors added Rs 81.90 trillion to their wealth in 2023. | Photo: Shutterstock
Investor wealth has surged by 110.57 trillion rupees so far this year, driven by a remarkable rally in the stock market, where benchmark indices have broken many records.
The market capitalization of BSE-listed companies has soared from Rs 110,57,617.4 crore to Rs 4,74,86,463.65 crore ($5.67 trillion) so far this year. The market valuation of all companies listed on the BSE touched an all-time high of Rs 477.93 trillion on September 27.
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The BSE Sensex has surged 12,026.03 points, or 16.64 percent, so far in 2024, thereby providing handsome returns to investors. The benchmark index hit its all-time high of 85,978.25 on September 27 this year, hitting many milestones in the process.
Analysts attributed the strong market rally to strong domestic liquidity as well as strong fundamentals of the Indian economy.
“One of the highlights of this year is strong domestic liquidity, driven by record inflows into the mutual fund sector,” Santosh Meena, head of research at Swastika Investmart Ltd, said.
Despite selling pressure from FIIs (foreign institutional investors), Indian stock markets hit record highs, generating strong gains, he said.
“In particular, mid- and small-cap indices outperformed and several stocks turned into multibaggers, rewarding retail investors handsomely,” added Meena.
At the start of the year, the BSE Sensex stood at 72,271.94 and the benchmark gauge now stands at 84,266.29.
Overall, 2024 was a stellar year for retail investors, marked by strong market performance, particularly in mid-cap and small-cap companies, supported by domestic liquidity and resilience to capital outflows of FIIs, he said.
The BSE midcap index has surged 12,645.24 points or 34.32 percent so far this year, while the small cap index has climbed 14,777.09 points or 34. 62 percent.
“The strong rally in recent weeks is a result of the Fed cutting rates and the hope that the RBI will also follow suit in its policy meeting,” said Prashanth Tapse, senior vice president (research) from Mehta Equities Ltd.
The 30-share benchmark BSE index ended above the 83,000 level for the first time on September 17. It finished above the all-time mark of 84,000 for the first time on September 20. The benchmark index ended above the 85,000 level on September 25.
“Global markets, despite ongoing geopolitical tensions, have also been supportive. A significant positive trigger for emerging markets like India was the start of the interest rate reduction cycle in the United States.
“This boosted investor confidence and cash flows into riskier assets. Additionally, crude oil prices remained relatively low throughout the year, despite geopolitical uncertainties, providing further support to the “Indian economy by easing inflationary pressures and improving market outlook,” Meena added.
In 2023, the benchmark BSE index jumped by 11,399.52 points, or 18.73 percent.
Dalal Street investors added Rs 81.90 trillion to their wealth in 2023.
The combined market valuation of all companies listed on the main stock exchange BSE reached the $4 trillion mark for the first time on November 29 last year.
The market capitalization of companies listed on the BSE touched the $5 trillion mark on May 21 this year.
Reliance Industries is the most valuable company in the country with a market valuation of Rs 19,82,265.88 crore, followed by TCS (Rs 15,50,820.85 crore), HDFC Bank (Rs 13,16,818.45 crore), Bharti Airtel (Rs 9,67,295.41 crore) and ICICI Bank (Rs 8,98,320.22 crore) in the top five.
On the future of stock markets, Meena said, “As the US elections approach and amid current geopolitical uncertainties, the market may witness a temporal correction and price corrections in certain segments. continue to emerge, driven by the strength of domestic liquidity.
(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First publication: October 2, 2024 | 5:26 p.m. STI