By creating an unprecedented wealth of USD 1 trillion in just six months, both exchanges of the Indian stock market Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have joined the exclusive USD 5 trillion club, defying the FII (Foreign Institutional Investors) pull out before the outcome of the Lok Sabha election on 04 June.
Notably, BSE and NSE journey from USD 4 trillion in November 2023 to USD 5 trillion this week took less than six months.
Data shows this leg of the bull run is fuelled by domestic institutional, retail and HNI (High Net worth Individuals) investors as FIIs have pulled out at least Rs 28,000 crore from the market this month.
Market experts said, assuming market returns in line with the last 10 to 20 years, and with the expectation of India becoming the third-largest economy by 2027, the market cap of BSE and NSE is expected to reach USD 10 trillion by 2030.
Market expert Ajay Bagga said, scale begets more inflows and initiates a virtuous circle of investment and market returns and said "There is a good chance of both NSE and BSE listed companies market cap crossing USD 10 trillion by or before 2030 amid huge growth in FDI and FPI flows on the back of the favourable economy"
He added "By the end of 2024, there is a good chance of the Indian markets being around USD 5.5 to 5.75 trillion. As the major Indian sectors like Financials and IT pick up traction, the Indian market cap will gallop faster. Listing of more unlisted companies will also add to this growth. With 130 Unicorns, India has a massive pool of potential listings that will increase the market cap further".
If we see the journey of market capitalisation of listed companies, it took 10 years to reach from USD 1 trillion to USD 2 trillion but less than 6 months to reach USD 5 trillion from USD 4 trillion.
With USD 5 trillion market cap, the Indian stock market is now ranked fifth in terms of market cap in the world.
The US leads with a market cap of almost USD 55.65 trillion, followed by China at a market cap of USD 9.4 trillion. Japan and Hong Kong market caps are about USD 6.42 trillion and USD 5.47 trillion.
"India's aggregate market capitalisation crossing the USD 5 trillion mark is driven primarily by continuing strong economic growth and robust corporate performance trends. India is now the world's fourth largest in terms of aggregate market capitalisation, this signifies the breadth and the depth of Indian listed equity space and its long term potential.," said Harsha Upadhyaya, CIO, Equity, Kotak Mutual Fund
"By FY26, the Nifty index can reach a level of 24,500 to 25,000 while the Sensex can touch the mark of 80,000 to 81000" said Shrikant Chauhan, Head equity research, Kotak Securities. (ANI)
