The combined market capitalisation of the companies listed on the Bombay Stock Exchange (BSE) has crossed the mark of Rs 300 lakh crore for the first time in today's trading session, after consistent flows from foreign investors propelled benchmark indices like the Sensex and Nifty 50 to fresh record highs.

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After hitting the milestone of Rs 100 lakh crore in December 2014, it took over six years to double that market capitalisation, despite the fact that many new companies debuted on the bourses during the period. The market capitalisation of listed companies on the BSE had crossed Rs 200 lakh crore in February 2021.

The Nifty 50 index, which has gained nearly 15 percent from its March 2023 lows, has been closing at record high levels for four days in a row. From the lows of March, the market capitalisation of all these listed companies has surged by nearly Rs 47 lakh crore led predominantly by Reliance Industries, which has added over Rs 3 lakh crore to its market capitalisation.

ITC and Bajaj Finance have followed suit, adding Rs 1 lakh crore each to their respective market capitalisation. Stocks like HDFC Bank, Adani Enterprises, State Bank of India and Tata Consultancy Services have contributed between Rs 70,000 crore to Rs 96,000 crore.

Despite high valuations, Indian equities remained a favored destination for equity investors as country’s robust macroeconomic fundamentals and strong corporate earrings continue to bolster investor sentiment. The aggregate earnings of Nifty 50 companies has increased 19 percent between financial year 2020-2023, with market returns of 14 percent between January 2020 to June 2023. The Nifty 50 is currently trading at 18.7 times of its one-year forward earnings, which is about eight percent higher than its ten-year average, Bloomberg data showed.

Foreign portfolio investors (FPIs) have pumped in $13.65 billion during the quarter through June, marking their biggest buying since December 2020. The benchmark Nifty 50 index has gained as much as 10.5 percent during the same period. Among the emerging markets, India has attracted more flows during the June quarter. While South Korea witnessed an outflow of $2.5 billion between April and June, Taiwan and Indonesia saw inflows to the tune of $3.3 billion and $645 million, respectively.

With a market capitalsiation of $3.6 trillion, Indian is ranked fifth among the global equity markets in the world. While the US market continues to occupy the top spot with 44.2 percent, other nations like China, Japan and Hong Kong among them contribute nearly 20 percent to the global stock markets.

(Edited by : Hormaz Fatakia)

First Published:Jul 5, 2023 3:13 PM IST