Mumbai: After kissing the $5 trillion mark intraday Tuesday, the market capitalization of 5,389 listed BSE companies fell just $3 billion short of the magic figure on a closing basis at $4.997 trillion, fuelled by a rise in mid-cap and large-cap stocks.
The near-historic closing came on a day the Reserve Bank of India (RBI) made a bountiful dividend to the government, which, at ₹2.11 trillion, was twice the amount markets had anticipated. Taken together with the jump in market cap, the developments could act as a sentiment booster for the market over the long term, according to market experts.
The all-India m-cap rose a stupendous ₹77.45 trillion over 118 sessions to Wednesday’s closing of ₹416.13 trillion. The BSE Midcap 150 contributed ₹18.4 trillion or 23.8% of the total increase in mcap over 118 sessions. It was followed by the Sensex 30, which accounted for ₹16.18 trillion of the rise (20.9%) and the BSE Smallcap 250, which contributed ₹6.73 trillion (8.7%) to the total jump.
Taken together all three indices contributed over half the increase in the all-India mcap from 29 November 2023 to 22 May 2024.
In terms of stocks, the top 5 mid-cap movers over the period included Trent, Cummins India, REC, PFC and Bhel. The top 5 large-cap movers were Reliance Industries, ICICI Bank, SBI, Bharti Airtel and M&M.
The jump in value comes despite foreign portfolio investors (FPI) net selling of ₹25,716 crore so far this year. It is backed by DII net purchases of ₹1.9 lakh crore and proprietary trader net buying of ₹37,578 crore, as per BSE data.
“Domestic retail investors using the MF route have been the driving force of the rally and would continue to absorb the FPI selling,” said Swarup Mohanty, CEO of Mirae Asset MF.
Mohanty said the RBI dividend to the government would enable whichever party comes to power on 4 June in its expenditure programme.
Nirmal Jain, founder of IIFL Group, said that the RBI payout was “a huge shot in the arm for the new government to continue infra spending without having to increase the fiscal deficit.”
Jain also expects the continuation of political and economic stability to benefit the markets over the long term.
In terms of performance, the BSE Midcap 150 has given a 24.1% return to a record 14,642.43 from 29 November to Wednesday closing. This is followed by BSE Smallcap 250 index which has rallied 20.1% to 6,377 over the same period and the Sensex which has gained 10.9% to 74,222.06.
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Published: 22 May 2024, 09:02 PM IST