BSE Hits All-Time High with Market Valuation of Rs 291.89 Lakh Cr
The Bombay Stock Exchange (BSE) witnessed a remarkable milestone on June 15, as the combined market valuation of all listed companies reached an unprecedented lifetime high of Rs 291.89 lakh crore. This remarkable achievement reflects a significant 16% increase in market capitalization since March 28, both in rupee and dollar terms. Despite the Sensex and Nifty hovering slightly below their all-time highs, the Indian markets have experienced a positive trajectory this year, exhibiting a gain of nearly 4% in both dollar and rupee terms.
Surpassing its previous peak of Rs 291.30 lakh crore on December 14, 2022, the Indian stock market has continued its upward trajectory. The Sensex reached a record high of 63,191.86, while the Nifty touched an all-time high of 18,812.50 on December 1, 2022. Throughout the year, both indices have shown substantial growth, with the Sensex and Nifty rising approximately 3.5% and nearly 10% respectively since March 28.
Factors Contributing to the Bullish Trend
Multiple factors have contributed to the sustained growth of the Indian markets. Positive macro-economic factors, better-than-expected earnings during the March quarter, stable commodity prices, the Reserve Bank of India’s anticipated pause in rate hikes, and consistent foreign investor interest have collectively bolstered market performance.
US Fed’s Impact on Investor Sentiment
Recent hawkish comments from the US Federal Reserve have prompted investors to contemplate the possibility of further interest rate hikes in the United States. While the Federal Reserve has temporarily halted its unprecedented series of rate increases, it has indicated the likelihood of implementing additional hikes later this year. The implications of these statements have led market participants to assess the potential consequences for global financial markets.
HSBC’s Optimistic View on India’s Economic Momentum
According to HSBC’s Chief Investment Officer for Southeast Asia, Global Private Banking and Wealth, James Cheo, India’s economic growth and earnings performance surpass many of its Asian counterparts. The country’s robust recovery indicators, such as the Purchasing Managers’ Index (PMI) and strong consumer rebound reflected in GST collections, indicate a revival in manufacturing, high-skilled exports, and services. Contributing to this growth are the government’s Performance Linked Incentive scheme and the diversification of the global supply chain, which have propelled a manufacturing renaissance. Additionally, digitalization has accelerated spending in the informal economy, while healthier bank balance sheets have stimulated credit growth.
Positive Outlook and Projected Targets
In light of rising global investor allocation and strengthening results, HSBC expresses confidence towards Indian stocks. India’s economy is strong, supporting the local bond market, with rapid economic growth, reducing inflation, and a steady rupee. Further support can come from the prospective inclusion of Indian bonds in JPMorgan’s GBI-EM bond index. Aiming high for the Sensex and Nifty, other brokerages including Morgan Stanley and Goldman have also projected optimistic outlooks for the Indian market. Assuming an anticipated EPS of 1,148 for March 2025, Prabhudas Lilladher values the Nifty at a discount of 12% to its 10-year average PE ratio of 20.8x, with a 12-month target of 21,013.
The Indian stock market’s ascent to an all-time high market valuation of Rs 291.89 lakh crore underscores the country’s economic resilience and investor confidence. Amid favorable macro-economic conditions, improving earnings, and positive global sentiment, the market has continued its upward trajectory. With expert projections pointing towards sustained growth, the Indian stock market appears poised to maintain its positive momentum, attracting both domestic and international investors.
The Bombay Stock Exchange, popularly known as BSE Limited, is an Indian stock exchange that is situated on Dalal Street in Mumbai. The oldest stock market in Asia and the tenth-oldest in the world, it was founded in 1875 by cotton merchant Premchand Roychand.
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