BSE-listed companies' m-cap crosses $5.5T mark for the first time
The total market capitalization of all companies listed on the Bombay Stock Exchange (BSE) has reached an unprecedented high, surpassing the $5.5 trillion milestone for the first time. This significant rise represents an increase of 22.6% from the $4.2 trillion recorded at the beginning of this year. The surge in market capitalization has been primarily driven by gains in the Sensex and broader markets, including the BSE Midcap and SmallCap indices.
Sensex and other indices register significant growth
The Sensex has recorded a significant rise of 13% this year. In addition, the BSE Midcap and Smallcap indices have each experienced a surge of over 30%. This robust performance across various market segments has contributed significantly to the overall increase in market capitalization. Several factors have been identified as catalysts for this market rally.
Optimism and global market conditions fuel market rally
The market rally has been fueled by several factors including optimism surrounding the return of the Bharatiya Janata Party-led government, a positive global market environment, and a resurgence of foreign portfolio investors (FPIs). Additionally, the positive takeaways from the Budget 2024, continued buying by domestic investors, expectations of strong economic growth, policy continuity, and an above-normal monsoon have further boosted the market.
Analysts express caution amid market rally
Despite the market rally, some analysts are expressing caution due to high valuations and weak June-quarter earnings. The Q1FY25 results show only a 0.7% YoY increase in net profits for Nifty 50 companies. This sluggish volume growth and moderate margin compression have led to a selective investment approach. The market has reacted positively to modest earnings beats while overlooking larger misses.
