India’s market capitalisation soars past $3.5 trillion mark

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The value of stock market listed companies in India soared past the $3 trillion on Monday, making Indian stock markets the eight largest globally, in terms of market capitalisation. This comes at the backdrop of the strong bull run since March 2020 despite the uncertainty of Covid-19 pandemic and its impact on the economy. The record run of markets and has taken India’s market cap to over the $3.5-trillion mark  which is more than double from about $1.3 trillion market capitalisation in March 2020.

The Indian equity benchmark indices clocked in record levels on September 6 as the  Nifty hit an intra-day record high of 17,429.50 and the Sensex claimed 58,515.80. The major indices also ended at record closing highs on Monday led by gains in IT, realty and auto stocks amid mixed global cues.

In 2021 so far, both the Sensex and Nifty have rallied to fresh life-high marks around 40 times each.

What has supported the record run in markets?

Many factors have led the stock markets to rally like never before. Global liquidity led by fund infusions by global central banks to support the economy, consistent buying by domestic and foreign institutional investors, recovery in earnings have led to a rally in equities globally including India. The sharp surge in new investors entering the stock markets in the absence of spending opportunities and even for secondary income generating options due to job and pay cuts has led to an influx of retail investors’ money.

Which stocks have been the top contributors to the rise in m-cap?

When one looks at the BSE market cap, the largest listed Indian firm Reliance Industries that saw its market value jump from Rs 6 lakh crore to Rs 16 lakh crore now. The other big wealth-creators so far have been from the IT sector, the market capitalisation of TCS moved up from Rs 6.4 lakh crore to over Rs 14 lakh crore, and Infosys saw its valuation rise from Rs 2.5 lakh crore to Rs 7.3 lakh crore now from March 24, 2020 to September 6, 2021.