India is now the world’s sixth-largest stock exchange, having overtaken France for the first time in market capitalization, with the benchmark Sensex rising over 23% this year.
India’s market cap stood at $3.4055 trillion on Tuesday, compared to $3.4023 trillion in France, according to data from Bloomberg. India recorded the biggest gain in market cap this year, an increase of 35% from over $873.4 billion or $2.52 trillion as on 31 December 2020. Since March 2020 lows, India added nearly $2.08 trillion market cap or 159% gain. In 2020, it added a market cap of $373 billion, or a gain of 17.4% from $2.14 trillion.
The US stock market is the world’s most valuable with a market cap of $51.3 trillion, followed by China ($12.42 trillion), Japan ($7.43 trillion), Hong Kong ($6.52 trillion) and the UK ($3.68 trillion). .
“Strong liquidity and positive macroeconomic cues are also likely to support domestic markets to continue their movements at record levels. With the festive season beginning and the easing of restrictions continuing, consumer demand will be closely monitored as it is expected to pick up. However, concerns still loom over the third wave of the (Covid-19) pandemic,” Motilal Oswal said in his report on Wednesday.
Both Sensex and Nifty advanced 23% and 25% year-on-year, respectively, while foreign and domestic investors bought shares worth $8 billion and ₹23,532 crore. Continuing foreign investor inflows, which stood at 11.5% (higher than the consensus estimate) for July, coupled with a sharp recovery in key economic indicators such as the index of industrial production, almost reaching pre-pandemic levels, also provide comfort, analysts said. he said. Besides, a moderation in retail inflation to 5.3% for August is a good sign. This will help the Reserve Bank of India maintain its soft monetary policy stance to support the ongoing recovery in economic momentum.
Better-than-expected GDP and Goods and Services Tax (GST) collections indicate a steady rebound in earnings. This will help the market maintain premium valuations. The GST Council is likely to meet on Friday to decide on the inclusion of diesel and petrol under the GST regime.
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