The benchmark Sensex is 2.4 per cent shy of a new lifetime high but the market capitalisation (m-cap) of all companies listed on the BSE is already in the record books. At Thursday’s closing price, the total m-cap of 4,776 firms on the BSE stood at Rs 280.5 trillion, surpassing the previous high of Rs 280 trillion on January 17.
This, even if the Nifty Midcap 100 is currently 5.4 per cent below its lifetime high, while the Nifty Smallcap 100 index is down over 20 per cent. Achieving the highest-ever m-cap value can be partly attributed to this year’s big new listings such as Life Insurance Corporation of India (m-cap Rs 4.4 trillion), Adani Wilmar (Rs 95,091 crore) and Delhivery (Rs 40,627 crore).
“The fresh all-time high in m-cap is largely because of LIC’s listing, which has added another over Rs 4.4 trillion. I am not very convinced with this rally, which has been very sharp and swift. I have been making the suggestion that people book profits, especially those who have entered the market over the past two months. There are some serious global headwinds and growth concerns. India may stand out over the long term but it won’t be entirely insulated in the short term. Every neighbour of ours has some economic issue, which could affect us. The corporate earnings growth hasn’t been great so far. And it could be the same for the September quarter as a lot of firms will be suffering inventory losses, ” said independent market analyst Ambareesh Baliga.
Companies in the automobile and staples space have clocked good performance on a year-to-date basis which too has lifted the m-cap.
“Recent gains have been helped by a combination of factors including encouraging macro data, fall in commodity prices, slowing inflation that may lead to central banks around the world softening their monetary policy stance earlier than expected. Return of buying by foreign portfolio investors has also helped. The steepness of the rally, from the lows of June 2022, without any major correction on the way, has been beyond the expectations of most investors. This also reflects the relative strength of the Indian indices amidst the global turmoil. While some stocks are still much below their recent highs, this is a normal phenomenon with sectors and stocks taking turns to perform. Investors now eagerly await the Nifty50 touching all-time highs,” said Dhiraj Relli, managing director and chief executive officer, HDFC Securities.
From this year’s low on June 17, the benchmark indices have rallied more than 17 per cent. India is the best-performing major market in local currency terms over the past two months.
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